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Post-Acute Care Can Help Accountable Care Organizations Save

Accountable care organizations may find financial opportunities in developing closer partnerships with post-acute care and long-term care facilities.

By Clay Ackerly, MD

As the Center for Medicare and Medicaid Innovation (CMMI) continues to deploy new programs, evidence of the impact of existing models continues to trickle in. One consistent theme: the importance of, and opportunity presented by, improvements in the quality of post-acute care (PAC).

Earlier this month, the New England Journal of Medicine published an evaluation of accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP). As the results were mixed and largely consistent with prior evaluations of the Pioneer ACO program, this study did not generate much publicity.

However, the study once again affirms the opportunity presented by improved post-acute management. For example, MSSP ACOs achieved a 6.1 percent reduction in skilled nursing facility (SNF) spending that generated 36 percent of the overall savings in 2012. These savings represent just the tip of the improvement iceberg.

SNFs care for some of the most frail and vulnerable patients and are a crucial partner in delivering high-quality post-acute care. But the opportunity for improvement is evident, whether that is represented through patient safety improvements, large numbers of preventable readmissions, excess length of stay, or overutilization of therapy services.  

As ACOs take broad responsibility for patients’ health outcomes, even after they have left the hospital, managing post-acute expenses is critical to the success of the model.

The study also makes clear that reducing PAC spending and working with a network of SNF providers to align incentives and goals is just as important under the success of the ACO program as it is in other models we’ve seen, including Bundled Payments for Care Improvement (BPCI) models.

Our own experience has shown how critical post-acute management is to bundled payment initiatives. What we’ve seen largely confirms the early data in the Lewin Group’s 2014 report on CMS BPCI models.  

Getting patients to the right level of care upon discharge is crucial, and requires early intervention in the hospital. The required innovations may be technically complex, such as improved evidence-based support tools, and they may also be organizationally complex, such as multidisciplinary discharge rounds. Most often, the solution is simple – take the extra time required to help the patient get home safely.

SNFs may represent the easiest way out of the hospital, but they often aren’t the most appropriate. Patients want to be back in their homes, and spending the effort necessary to make that a reality requires tools and effort, but is increasingly achievable.  

Again, SNFs have a crucial role to play in the care continuum for particular patients. For those patients going to skilled nursing, ongoing monitoring of their care by ACOs to ensure appropriate length of stay and to assist in discharge planning back to the community is an essential service to provide.

Post-acute providers should be seen and engaged as essential partners. They are hungry and willing to engage with physicians on new and different care models. Early network development shows promise in reducing utilization and breaking down silos of care.

While the NEJM’s report of $238 million in savings in 2012 is encouraging, ACOs in higher spending areas saw bigger savings than those in more efficient markets, much as we’ve seen in studies of Pioneer ACOs.

While it might be easy to chalk these gains up to the reaping of low-hanging fruit, opportunities still remain. Data from Medicare Advantage and BPCI show reductions or more than 20 percent in SNF spending is achievable while maintaining outcomes, more than three times that seen in the early ACO data.

More complex riddles also loom.

It’s no surprise, then, that the ACO nut has been difficult to crack. The model is complex and has many competing priorities; and, for hospital-based ACOs, competing financial incentives – as improved readmissions may undercut the financials of their hospitals.

Data standardization, improved care transition, high-risk case management, ongoing engagement with community-based services, analyzing payment variation, and other innovations show promise in improving outcomes and addressing more complex issues, despite the long-term commitments these initiatives present.

The NEJM study’s results reaffirm that a focus on PAC is required and can have a meaningful impact for patients. The work is just beginning and the next test for ACOs will be to take advantage of the unique opportunity presented by the ACO model to improve on these results by investing in discharge planning, care redesign, and innovative partnerships across the continuum of care.


Clay Ackerly, MD, is the chief clinical officer at naviHealth and responsible for clinical operations and care redesign. Prior to joining naviHealth, Ackerly served as associate medical director for Population Health and Continuing Care at Partners Healthcare, as well as an assistant chief medical officer for Non-Acute Services at Massachusetts General Hospital. He has also served as an innovation adviser for CMS and has held roles at Duke University Health System, the FDA, and the White House, where he advanced multiple healthcare quality improvement efforts.

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