This past October, CMS issued its final rule on the Medicare Shared Savings Program, which established the parameters of accountable care organizations. The final rule, which took effect Jan. 1, stipulated that providers have to make a three-year commitment to care for a group of at least 5,000 Medicare beneficiaries.
However, the development of the MSSP was not smooth sailing entirely, as the proposed rule caused healthcare groups to submit more than 1,300 comments to CMS. David Goldstein, president of online health management company Health Options Worldwide, says ACOs are moving in the right direction, but there are a few variables that could cause concern as ACOs get under way.
1. Decreased quality measures. In the final ACO rule, the number of quality measures that ACOs had to meet was reduced from 65 to 33. CMS said it modified the proposal because several of the measures were "perceived as redundant, operationally complex or burdensome."
However, Mr. Goldstein says ACOs are all about improving quality, and chopping the quality measures in half makes it somewhat more vague to determine what quality actually is. "It was a good move in the sense that by removing a good chunk of [the quality measures], more people will get involved," Mr. Goldstein says. "But one of the biggest obstacles is: How do you keep people within the system? You need quality metrics to see who the best doctor is that you can see for the best reasons at the best time."
2. Patient infrastructure. According to the final rule, Medicare beneficiaries are assigned to an ACO based on who their primary care physician is, but they are still free to visit any healthcare provider. Mr. Goldstein says ACOs are still on the hook for those patients if they decide to receive care elsewhere.
"People should be able to see who they want," Mr. Goldstein says. "But one of the biggest challenges for ACOs is that after investing all of this money into their infrastructures, patients are able to leave the system and see any provider they'd like, which will cause leakage and healthcare costs will continue to rise. ACOs have to be able to provide efficiency and make themselves attractive so people stay within the system. They need to make sure they have primary care providers, specialists — somebody that can be their focal point — so the patient says, 'Let me choose within this system.'"
3. Value-based models will decrease revenue in the short term. The ACO program, by definition, is reducing the consumption of its patients' services in order to share more in the savings that result from focusing on the continuum of care. Reducing services while concurrently sitting in a fee-for-service system, though, also decreases a hospital or health system's revenue levels. A true bundled payment system in the future could create more savings, but ACOs have to weigh whether they can sustain the near-term dips in revenue.
"Fee-for-service is trending downward," Mr. Goldstein says. "If we can focus on prevention — for example, preventing a person with diabetes from having their foot amputated — and tie revenues to that, then we see a much healthier system."
However, the development of the MSSP was not smooth sailing entirely, as the proposed rule caused healthcare groups to submit more than 1,300 comments to CMS. David Goldstein, president of online health management company Health Options Worldwide, says ACOs are moving in the right direction, but there are a few variables that could cause concern as ACOs get under way.
1. Decreased quality measures. In the final ACO rule, the number of quality measures that ACOs had to meet was reduced from 65 to 33. CMS said it modified the proposal because several of the measures were "perceived as redundant, operationally complex or burdensome."
However, Mr. Goldstein says ACOs are all about improving quality, and chopping the quality measures in half makes it somewhat more vague to determine what quality actually is. "It was a good move in the sense that by removing a good chunk of [the quality measures], more people will get involved," Mr. Goldstein says. "But one of the biggest obstacles is: How do you keep people within the system? You need quality metrics to see who the best doctor is that you can see for the best reasons at the best time."
2. Patient infrastructure. According to the final rule, Medicare beneficiaries are assigned to an ACO based on who their primary care physician is, but they are still free to visit any healthcare provider. Mr. Goldstein says ACOs are still on the hook for those patients if they decide to receive care elsewhere.
"People should be able to see who they want," Mr. Goldstein says. "But one of the biggest challenges for ACOs is that after investing all of this money into their infrastructures, patients are able to leave the system and see any provider they'd like, which will cause leakage and healthcare costs will continue to rise. ACOs have to be able to provide efficiency and make themselves attractive so people stay within the system. They need to make sure they have primary care providers, specialists — somebody that can be their focal point — so the patient says, 'Let me choose within this system.'"
3. Value-based models will decrease revenue in the short term. The ACO program, by definition, is reducing the consumption of its patients' services in order to share more in the savings that result from focusing on the continuum of care. Reducing services while concurrently sitting in a fee-for-service system, though, also decreases a hospital or health system's revenue levels. A true bundled payment system in the future could create more savings, but ACOs have to weigh whether they can sustain the near-term dips in revenue.
"Fee-for-service is trending downward," Mr. Goldstein says. "If we can focus on prevention — for example, preventing a person with diabetes from having their foot amputated — and tie revenues to that, then we see a much healthier system."
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