The new year means many different things to people, from celebrations to resolutions, starting over to joy and happiness. For healthcare, it brings the potential for finally fixing the flawed Medicare physician payment formula, known as the Sustainable Growth Rate (SGR).
It also means a new group of hospitals, health systems, physicians and other providers will begin their journey as new participants in the Medicare Shared Savings Program (MSSP).
Since the passage of the Affordable Care Act, there’s a focus on accountable care organizations (ACOs) and the ability of this new payment and delivery model to meet the three-part aim of better outcomes, better patient experience and lower costs.
The Centers for Medicare & Medicaid Services (CMS) recently announced 123 new organizations have been selected to participate in the MSSP program, with the performance period beginning on January 1. They join over 250 ACOs currently in the program, which provide care for over 4 million patients.
A recent survey of hospital CEOs found that the number of health systems planning to start an ACO is projected to double by the end of 2014.
This movement towards ACOs has major market implications for providers that are considering joining MSSP for the January 2015 start date, because of the way CMS attributes a beneficiary to an ACO.
Essentially, the program requires that the physician used for alignment (i.e., the physician who provides the plurality of primary care services to a beneficiary) and the other physicians who use the participating practice’s tax identification number must be exclusive to the ACO.
Therefore, if there are a large number of ACOs participating in the MSSP in your market, it could be challenging to identify and engage primary care physicians who are able to partner in the ACO.
If you’re considering joining the MSSP in 2015, start planning now.
Here’s a list of suggested activities to get you started:
1. Begin engaging physicians
It’ll be critical to start outreach to potential partners for your ACO early. Identify potential partners early. This is even more critical if you’re planning to participate in Track 1, where there is no down-side risk, because the minimum savings rate required by CMS is based on the number of beneficiaries aligned to your ACO.
This can range from 3.9% savings for 5,000 beneficiaries to 2% for 60,000 beneficiaries (see the chart below).
So the more physicians who perform primary care services, the more beneficiaries will be aligned to your ACO. Thus, the lower the savings threshold for your ACO.
And it will be critical to solidify physician leadership, so they will be able to champion the care redesign required to succeed in population health.
2. Start thinking about a vehicle for your ACO
There are many structural options to choose from, such as clinically integrated systems and PHOs. Many of these approaches will require the development of a new legal entity and most likely new governance structure, since 75% of the board must be composed of ACO participants and at least one beneficiary must serve on the board.
3. Complete an assessment of your population health capabilities
Particularly, it’s important to accurately assess the current state of your population health management capabilities and identify operational “gaps” that may prevent you from realizing the full potential of the program.
Plus, identifying opportunities will further integrate your efforts to take advantage of economies of scale and cost savings. Performing an assessment will help prioritize those activities and inform resource allocation.
If planning for accountable care is part of your organization’s plans for 2014, these are only a few of the many tips to help you prepare. The MSSP is a great option to improve the quality of care and reduce unnecessary costs for your Medicare beneficiaries.
Regardless of the model your organization chooses, understanding your market and knowing your competition is a must to survive in the current healthcare landscape.