Predictability and Simplicity Needed to Help ACOs Take on Risk, Panelists Say at NAACOS

With a country as diverse as the United States, the government cannot make decisions about what is best for patient populations, said Adam Boehler, deputy administrator and director of the Center for Medicare and Medicaid Innovation, during the opening plenary at the fall 2018 meeting of the National Association of ACOs (NAACOS), held October 3-5 in Washington, DC.

Boehler added that decisions should be made locally, but that the government’s role is to give people the tools to operate and deliver care. There are 3 things that CMS has identified as working across all its programs, including accountable care organizations (ACOs), and that will drive how it thinks about models going forward: transparency, predictability, and simplicity.

In a following panel, Boehler was joined on stage by Katherine A. Schneider, MD, of Delaware Valley ACO; Stephen Nuckolls of Coastal Carolina Quality Care; Richard J. Gilfillan, MD, of Trinity Health; Thomas Kloos, MD, of Atlantic and Optimus ACOs.

A recent controversy around ACOs has been how to measure savings. CMS measures them based on the benchmark, which tends to underreport savings, while others, including NAACOS, have used a difference-in-differences regression to compare spending by ACO beneficiaries with a geographically matched comparison group of beneficiaries that was eligible to be assigned to an ACO but was not. The difference-in-differences regression has found much higher savings than those estimated by CMS.

CMS is trying to make risk more attractive for ACOs.

While savings are nice, the panelists all agreed that savings are not the only way to measure success for ACOs. Schneider noted that looking at actual outcomes would be a good indicator of how well ACOs are actually performing and whether or not they’re actually changing how care is delivered. Nuckolls added that quality measures are also important, and with current data, healthcare providers are much better at closing gaps in care. For Coastal Carolina, being able to show that it was improving care was crucial because it took the ACO longer to start achieving savings.

“It took time for us to really get there [achieving savings], even though we were making differences early on in quality,” Nuckolls said. “So, I do think there are many different ways to measure success in a program like this.”

Looking at the average savings for the entire program cannot be the way the success of the Medicare Shared Savings Program (MSSP) as a whole is determined to be successful or not, Gilfillan said. What is more helpful is looking at those ACOs that did achieve savings and improve care and figure out how to get others to reproduce that success.

He also took time to discuss CMS’ recent MSSP proposal that would push ACOs to take on risk faster. He cited a recent study¹ in New England Journal of Medicine by researchers at Harvard who found that the most success and savings were among ACOs that were not at risk.

Not all entities can take on risk, Gilfillan said. Physician groups and small hospitals may not be able to take on risk, and even medium-sized hospitals could have trouble.

“So, it’s not 1-size-fits-all,” he said. And I think there is no mechanism to drive consolidation of our healthcare system faster than requiring everyone to take risk under ACOs.”

Kloos noted that his ACOs are not risk-averse, but the problem is that they want to be able to better predict risk. The issue of predictability is the biggest challenging facing his ACOs.

Boehler agreed that value does not mean taking on risk, and that there are a lot of providers and organizations who should take on risk. And for those who don’t know what they’re doing, taking on risk is not an area they should mess around in.

CMS is thinking of an inclusive approach for those who don’t want to or shouldn’t take on risk, he said. The agency is considering how to get rid of the fee-for-service system that creates the wrong incentives while putting in a system of outcomes.

While he said that it’s CMS’ job to create a predictable and simple way to take on risk so that ACOs can succeed, but he also had some tough words for ACOs on the fence.

“It’s also our job to say to folks, ‘If you’re not cutting it, get out of the way,’” Boehler said, adding, “because there are others that will come that will cut it.”

Reference

1. McWilliams JM, Hatfield LA, Landon BE, Hamed P, Chernew ME. Medicare spending after 3 years of the Medicare Shared Savings Program. New Engl J Med. 2018;379(12):1139-1149. doi: 10.1056/NEJMsa1803388.