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3 changes needed to scale public, private ACOs

By Healthcare Finance Staff

The ambitious new value-based healthcare coalition, including Aetna and HCSC, is wasting no time dispersing ideas. Consensus on reform may be difficult, and the work ahead even more so.

In late January, the newest and potentially highly influential Health Care Transformation Task Force was unveiled, with members from a cross section of American healthcare and business.

Among the payers are Aetna, Health Care Services Corporation, Blue Shield of California, and BCBS of Massachusetts. Providers include Ascension Health, the nation's largest nonprofit health system, Trinity Health, whose CEO is chairing the Task Force, as well as Partners HealthCare and Providence Health & Services. There is also the Pacific Business Group of Health, Caesars Entertainment and the National Partnership for Women and Families.

Their goal is bold and on its face simple: having 75 percent of their healthcare revenue and spending in value-based or accountable care contracts by 2020. Getting to that point, though, is going to be very complex, and there may not be one standard for value-based care.

But the Task Force is setting its sights in large part on aligning public and private accountable care organizations. The participating companies have already developed a consensus on the changes and standards need to expanding ACOs beyond their current footprint.

So far, the members have three major ideas, which form the basis for their recommendations to the Centers for Medicare & Medicaid Services.

1. Honoring patient choice and improving patient attribution

The Triple Aim depends on ACOs having an identifiable patient population, but also patient autonomy and choice, the Task Force said. "Attribution models should support a patient's ability to actively attest to their participation in a particular ACO," the members concluded.

The Task Force suggests that beneficiaries could receive "tentative assignment" to an ACO based on historical claims data, and then would have a chance to confirm attribution. "After all opportunities for active beneficiary attestation have been exhausted, a passive alignment should take place, utilizing a step-wise, plurality of primary care services methodology where an ACO designates which providers are eligible for attribution."

If that kind of methodology ends with a beneficiary assigned to multiple ACOs, the most recent service provider "should act as the tie-breaker."

2. Quality measurement improvement

On this promising yet controversial endeavor, the Task Force outlines four principles: payment, alignment, statistical soundness and innovation incentives.

The first principal, according to the Task Force's consensus, is that "payers should create an environment where quality outcomes measurement can be used for more appropriate payment, consumer engagement, and public accountability."

The goal is for quality measurement to "create an explicit business case for practicing continuous quality improvement rather than being treated as an initiative, extraneous to the everyday operations of the organization. Essential to creating such an environment is ensuring that all measures that directly affect provider payments be exclusively based on outcomes and be uniform across all payers, both public and private, and all populations such that quality efforts can truly become an integral part of the provider's workflow."

To "bear market forces on healthcare, patients must be empowered" by quality information that lets them compare providers, and thus "quality measures for consumer engagement should be designed and scored in a way that allows consumers to compare and evaluate on multiple levels including at the organization, practice and individual provider level." For public accountability, quality measures "need to include both claims and patient-satisfaction data in order to tell the complete story behind care patterns and utilization." As the Task Force sees it, "public reporting as a policy will ensure the incentives for addressing organizational deficiencies are always present."

Second in the quality principles, there should be "aligned approach" across measurement for payment, consumer engagement, and public accountability. "Consistent reporting structures that are maintained at least three years at a time will allow the stability and time necessary for true evaluations. New reporting systems and quality measures without adequate or valid sample sets should fall under a payment-for-reporting structure for the first two years. Additionally, quality measurement programs should allow a minimum of eight weeks for reporting on quality measures."

Thirdly, payers and providers should explore two statistically-sound quality measurement approaches, "establishing a system that rewards both improvement and achievement." Quality benchmarking methodologies should include factors to "incentivize improvement over prior performance (historical performance) in addition to achievement relative to industry standards (absolute performance). Extra emphasis should be given to reward groups that are able to disproportionately improve conditions and provide high quality care for traditionally disadvantaged populations."

The fourth quality principle is all about incentivizing innovation and emerging approaches. "National quality standards should include efforts to diffuse best practices for quality improvement, such as is done under the auspices of the CMS ACO Learning Network. Incentives should be structured in a way that encourages ACOs to contribute to and refine existing quality measures."

3. Improving financial stability

The Task Force's last major idea, to stabilize financing, also has four principles -- simplification, prospective attribution, data integrity and support for transition.

On simplification, the Task Force proposes that payers stick to two financial models, so all providers can participate.

One of these models should use historical claims to ensure "the participation of high-cost providers" -- lest they be scared away. The other "should be based on community-ratings with health-status adjustments," using local costs and trends and prospective targets. Both of the models should be based on "simple, open-source methods and codes that allow for replicability," according to the Task Force, and they should also "carve more care 'in' to encourage more comprehensive accountability." In other words, if ACOs yield savings but cannot meet the minimum savings rate the payer should pool program year data to calculate an adjusted minimum savings rate.

Second on the financial front: "As ACOs accept more financial risk and demonstrate high-quality care, allow ACOs to better facilitate prospectively-attributed beneficiary receipt of care in appropriate settings."

ACOs need to do a better job educating beneficiaries on covered services and treatment options, including notifications and appeals. "Payment policies that determine the site of care for beneficiaries rather than physician judgment should be waived," the Task Force suggests. " Fundamental changes to the underlying payment systems to complement the move to full risk, including changes in bundled payments, prepayment, and capitation, should be pursued."

Third, watch out for that data. The Task Force suggests that ACOs "Continuously improve access to complete, accurate, reliable, timely data. There is a need to improve reliability and comparability of existing data sets. For delivery systems, a robust process for changing or updating data sets such as test files should be developed." Payers and providers need to work on reducing the cost and burden to access, aggregate and exchange clinical data.

The last principle on financing: "Support transition to Triple Aim programs."

So far, ACOs require significant startup costs and administrative burden. These need to be reduced, "especially for smaller provider systems and physician groups," the Task Force argues. "ACOs should be financially encouraged to move more quickly to two-sided risk, by providing a higher percent of savings to two-sided risk ACOs and removing the minimum savings and loss rate requirement for two-sided risk ACOs."

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