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Value-Based Care News

How Next Generation ACOs Built a Foundation for Success

Next Generation ACOs saved Medicare $62 million their first year by creating the right workforce, improving care management and transitions, and using data analytics.

Next Generation accountable care organizations (ACOs)

Source: Thinkstock

By Jacqueline LaPointe

- Employing additional administrative staff, prioritizing care management, and building data analytics capacity were key strategies accountable care organizations (ACOs) implemented to participate in the Next Generation model, CMS recently reported.

The initial group of ACOs generated net savings of $62 million to Medicare while maintaining care quality, CMS reported in an evaluation of the model’s first performance year in 2016, performed by NORC at the University of Chicago.

The 18 Next Generation ACOs that treated over 477,000 beneficiaries decreased Medicare spending by $18.20 per beneficiary per month in 2016.

The organizations significantly reduced spending and maintained care quality all while taking on the greatest financial risk model offered by a Medicare ACO program. Next Generation ACOs can assume either 80 or 100 percent risk, with the majority participating in the 80 percent risk track in 2016.

How did the first round of risk-bearing Next Generation ACOs realize savings and maintain care quality? Through a leadership survey, interviews, and claims data, CMS found that the organizations implemented the Medicare ACO model by focusing on workforce, care management, care transitions, and data analytics.

Next Gen ACOs added more administrative, care management staff

READ MORE: For Ongoing ACO Shared Savings, Look Outside Inpatient, Primary Care

The majority of ACOs participating in the first Next Generation performance year reported hiring staff to meet the requirements of the Medicare ACO model. Thirteen of fifteen organizations told CMS they employed additional staff to implement the model.

Next Generation ACOs were more likely to hire care management staff, with 221 additional care management experts hired in 2016. The organizations also sought additional administrative staff, with 80 administrative employees hired.

To implement the Next Generation model, the ACOs also reported building their internal data analytics workforce. However, the process of creating a data analytics team was a major challenge.

Only three of 13 Next Generation ACOs told CMS they had sufficient staff to manage their current data collection, processing, and analytics needs.

Many of these organizations said they used a variety of strategies to meet their data needs, such as hiring more full-time staff (five ACOs), partnering with consultants or other third-parties for analytics (three ACOs), or engaging a third-party organization for data collection and processing (one ACO).

READ MORE: Exploring Two-Sided Financial Risk in Alternative Payment Models

Working with data analytics vendors, however, did not always benefit the ACOs. Next Generation ACOs reported weak results from the data analytics performed by third-party organizations, and some said they had to switch vendors during the performance year.

Developing an in-house data analytics team also proved to be a challenge. The organizations explained that they had to learn how the Next Generation model used claims data and quality measures, as well as how to shift their systems to accommodate prospective alignment.

Centralized care management teams standardized ACO processes, programs

Care management teams primarily focused on standardizing processes and protocols during the first year of the Medicare ACO model, all the organizations told CMS.

The ACOs also agreed that their care management strategy centered on medication reconciliation, disease management and chronic care programs, and care plan development and sharing.

Fourteen of the 15 ACOs participating in the survey and interviews also said they focused on improving communication protocols between providers and care managers in 2016.

READ MORE: A Holistic View of the Patient Enables Risk-Based ACO Success

Other top care management strategies for Next Generation ACOs in 2016 included working with community service providers (13 ACOs), implementing interdisciplinary teams (13 ACOs), and creating patient activation initiatives (six ACOs).

The care management programs primarily targeted high-risk patient populations and those with greater-than-average healthcare utilization, the organizations added. All of the surveyed ACOs focused their care management services on patients with chronic conditions, frequent emergency department visits, and recent inpatient stays, while fewer ACOs targeted low-risk patients.

Next Generation ACOs used a wide range of staff to carry out care management programs, the report showed. Nearly all organizations used interdisciplinary teams, with care navigators or managers typically acting as the primary contact person for patients and providers.

The ACOs directly employed between two to 50 care managers in 2016. But about one-half of the organizations had 15 or more fewer.

Registered nurses and social workers were the most common type of employee implementing the care management initiatives. Although, several Next Generation ACOs employed community health workers, especially when implementing self-management programs.

The majority of ACOs employed centralized staff at one administrative or clinical site that services multiple participating and preferred providers, CMS reported.

Care transitions a top priority for first year Next Gen ACOs

Improving care coordination and care transitions were a major focus for almost all Next Generation ACOs during their first performance year.

ACO leaders agreed that post-acute care was one of the biggest cost-cutting opportunities for their organization, and the organizations worked to reduce those costs from the moment providers identified a patient as needing post-acute care services.

All fifteen Next Generation ACOs participating in the interviews and survey prioritized improving care transitions involving skilled nursing facility (SNF), the report added.

To improve SNF transitions, most of the ACOs (nine organizations) used evidence-based transition protocols, such as the Coleman model, Project Re-Engineered Discharge (RED), or Project Better Outcomes by Optimizing Safe Transitions (BOOST).

Many of the organizations also expanded care teams to add a post-acute care coordinator or care team member. These staff performed rounds in SNFs and conducted home visits to improve care transitions.

Focusing on SNF use paid off for Next Generation ACOs. Lower SNF use contributed the most to spending reductions, with three ACOs reducing SNF spending by $16.61 million in 2016.

In addition to SNF transition improvements, most of the ACOs also reported adding social workers to discharge planning teams. The 12 organizations hired the social workers to coordinate the delivery of human services (e.g., meals, transportation, or daily living assistance) and 11 of the organizations also used the workers for health services.

In addition, 12 Next Generation ACOs reported implementing processes for a care management team member to meet patients in person prior to a hospital discharge. Eleven ACOs also used care management team members to educate and engage caregivers about the care transition.

While improving care transitions was a top priority, the Next Generation ACOs reported challenges with enhancing care post-discharge. The inability to identify aligned beneficiaries when they received care outside of the ACO network was a major obstacle for managing care transitions, ACO leaders said.

Leaders also identified building post-acute care networks as a top challenge of managing care transitions.

Data analytics supported activities throughout the ACO

In 2016, Next Generation ACOs used data analytics to manage patient populations, monitor performance, and manage financial risk, the report showed.

To manage patient populations, the ACOs relied on data analytics to identify gaps in care, improve care transitions, and support post-discharge programs. ACO leaders said they used data and information systems to pinpoint aligned beneficiaries who end up in the hospital (inpatient or emergency department) or primary care settings.

Twelve organizations also stated that they knew about one-half of inpatient admissions occurring among aligned beneficiaries in real time in 2016.

In addition, most Next Generations ACOs said health IT enhanced care coordination, chronic disease management, hospital admissions, and screening and vaccinations “to a very large extent.”

To monitor performance, Next Generation ACOs used financial, claims-based utilization, patient satisfaction or experience, and practice-based quality data, CMS reported. More than one-half of the ACOs also tracked physician-level quality and clinical data to monitor their performance.

With a firm grasp on their performance, ACO leaders shared performance indicators with their providers to ensure success. Ten organizations said they shared four or more indicators with their providers, and the most commonly shared indicators were financial measures, claims-based utilization measures, patient satisfaction measures, and quality measures.

Next Generation ACOs primarily shared performance with providers through reports and dashboards, which were typically integrated in the EHR.

Data analytics were also key to managing financial risk, the Next Generation ACOs agreed. Twelve organizations reported using information systems to track utilization as a way to manage financial risk, the report stated.

However, the ACOs reported troubles with using data to support financial risk management. Almost all ACO leaders said not knowing their beneficiaries’ or populations’ risk score and spending in advance made it difficult to develop accurate financial forecasts and strategies.

In general, Next Generation ACOs also cited interoperability as a major obstacle to building data analytics capabilities.

About one-half of the 2016 Next Generation ACOs stated that their network used nine different EHRs. Operating a network with different EHRs created interoperability challenges, which impacted information exchange for care coordination, quality improvement, and performance improvement, CMS found.

2016 was an important year for Next Generation ACOs. Through the trials and tribulations, the risk-bearing organizations developed a foundation for continued success by developing an appropriate workforce, improving care management and transitions, and establishing data analytics platforms.

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