The Medicare Payment Advisory Commission is looking into ways that Medicare can strengthen accountable care organizations and the shared savings program to make them more effective for providers and patients, including improving benchmarks, adding more risk and getting beneficiaries more involved.
Currently, patients included in an ACO may still use the services of another provider, but the ACO providers are still financially responsible for that beneficiary, said David Glass, a MedPAC principal policy analyst, at the group’s meeting last week. As a result, the patient may unknowingly weaken the ACO providers’ chances for reducing the cost of care and subsequent shared savings.
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“The notion of a level playing field is significantly unbalanced,” said Craig Samitt, MD, a MedPAC member and president and CEO of Dean Health System Inc., in Madison, Wis. For providers, the investment and responsibility for patient outcome is close to that of a Medicare Advantage plan in an environment that is much more like fee-for-service. “It’s hard to bend the cost curve,” he said.
Patients often don’t know that they are part of an ACO. “If people knew they were enrolled in an ACO plan, there would more patient engagement,” said Jon Christianson, University of Minnesota public health policy and management professor.
MedPAC is exploring the idea of Medicare designing a supplemental or Medigap plan for seniors that would promote their use of an accountable care organization. The Medicare Select plan would offer lower cost-sharing in network and increase interest and loyalty by patients with their ACO primary care providers, Glass explained.
Medicare has 220 Medicare Shared Savings Program ACOs and 32 Pioneer ACOs, with four million, or 10 percent, of Medicare beneficiaries included in them. The Pioneer ACOs have tougher requirements and more risk than the shared savings program.
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The Centers for Medicare &Medicaid Services reported this summer on the first year of its ACO models, with the Pioneer models spending 0.3 percent more per beneficiary compared with 0.8 percent more per beneficiary nationwide, saving 0.5 percent. But the cost of running an ACO and hiring care coordinators was 1 percent to 2 percent in the first year.
Of the original 32 Pioneer ACOs, 23 are staying in the demonstration, seven are applying to be in the less risky shared savings program, and two likely will not be Medicare ACOs.
MedPAC plans to hire a contractor to interview ACOs and to further examination the variation in performance of the Pioneer ACOs and whether benchmarks need to be refined for program savings. The three-year Medicare shared savings contracts may need to be tweaked in the next set of contracts around establishing benchmarks and evaluating performance based on service use.
In the short term, MedPAC wants to explore beneficiary notification and opt-out and lower cost-sharing for getting primary care in an ACO. It also wants to move toward common quality measures for ACOs, fee-for-service, and Medicare Advantage primary care.
MedPAC members also discussed the need for ACOs to take on more risk over the long term. “We need to move away from one-sided risk in shared savings,” said Glenn Hackbarth, MedPAC chairman. He added that the commission needs to consider what it would mean if CMS required two-sided risk in the next set of contracts. “It will have some impact on providers and tension for beneficiaries,” he said. CMS is expected to propose rules for the second set of three-year contracts that expire in 2015.
“How targets are set will be a hot topic, whether they are generous versus less generous,” Hackbarth cautioned. “If people are losing money because they were efficient in the past, it will make a lot of people unhappy.”
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