Accountable Care in 2014
Four Years Post ACA: How Will ACOs
Evolve?
Jane DuBose, Senior Director, Decision Resources Group
Presentation to NAMCP, Fall 2014
1Accountable Care Agenda
ACO and value-based landscape
ACO performance
Physician control
Looking ahead to the next generation of ACOs
2014‐2015: Landscape is changing
New types of partnerships between medical groups, managed care and hospitals are emerging Health plans and providers are merging to survive reimbursement cuts Medicare moving away from FFS model and experimenting with new options to manage beneficiaries Integrated delivery networks and advanced medical groups entering ACO market and taking more risk for quality incentive and outcomes‐ based rewards 3Landscape is evolving from
transactions to value
TRANSACTION‐
or SERVICE‐BASED
TRANSACTION‐
or SERVICE‐BASED
Visit Test Bed-Day Rx ProcedureVALUE‐BASED
VALUE‐BASED
Episode Disease Population Service 4Performance contracts defined
• ACO – a clinically integrated group of providers that accepts
financial risk for the management of a patient population
• Clinically Integrated Network – a group of clinicians who agree
to a formal set of standards for diagnosing, treating and
coordinating care for a patient population
– Share risk for clinical outcomes, as well as safety and adherence to
evidence‐based care
• More than 840 separate ACO contracts are counted in fourth
quarter 2014 involving patients insured by commercial,
Medicaid and Medicare payers
Source: CMS, Decision Resources Group 5ACOs got their start in 2005
2005
• Physician Group Practice Demonstration Program from CMS begins • 10 large multispecialty groups of ~5,000 physicians • Partly used as the model for the Medicare ACOs2009‐2011
• BCBS of Mass begins Alternative Quality Contract with a global budget and financial incentives tied to quality outcomes • Advocate Health Care & BCBS of Illinois announce shared savings contract in 20112012‐2014
• CMS launches Pioneer ACO program, selecting 32 provider‐led organizations for three‐ year shared savings/shared risk contracts; by 2014, the list diminishes to 19 • CMS names more than 300 provider organizations to three‐year contracts for shared savings on performance of 33 quality metrics and improving on financial benchmarks Sources: CMS, Decision Resources Group, BCBS of Illinois and Massachusetts 6Calif., Fla., and Mass. are homes to
highest number of ACOs
WA OR CA NV ID MT WY UT AZ NM CO ND SD NE KS OK TX MN I A MO AR LA AK MS TN KY IL WI MI IN OH G A AL FL SC NC VA WV PA NY ME VT NH MA RI CT NJ DE MD HI Number of ACOs■
0■
1‐4■
5‐10■
11‐20■
21‐30■
>31■
In Development Source: Decision Resources Group’s ACO Database, as of October 2014 7From a patient lives view, large states
lead in this ACO metric
WA OR CA NV ID MT WY UT AZ NM CO ND SD NE KS OK TX MN I A MO LA AK MS TN KY IL WI MI IN OH G A AL FL SC NC VA WV PA NY ME VT NH MA RI CT NJ DE MD HI Number of Patients ■ <100,000 ■ 100,000 – 249,999 ■ 250,000 – 499,999 ■ 500,000 – 749,999 ■ 750,000 – 1,000,000 ■ >1,000,000 ■ None or Unknown Source: Decision Resources Group’s ACO Database, as of October 2014 8ACOs: Organization view
50.20%
42.90%
5.90% 1.00%
# of ACOs by Type of Payer
Commercial
Medicare
Combination
Not available
N= 848Medicare Medicaid Commercial
~ 340 Medicare Shared Savings Program 19 Pioneers, down from 32 in 2012 ~ 53 operating or in development in 11 states 426 performance‐ based or shared savings contracts between payers and provider groups MSSPs must have 5,000 beneficiaries; Pioneers, 15,000 States have not set minimum patient requirements From ~ 5,000 to 100,000 covered lives in a single ACO Sources: Navigant HealthCare, ACO, 2.0, Decision Resources, CMS 9
ACOs: Payer view
About Cigna’s CCAs Approach Results• Cigna’s Collaborative Care Agreements with physician groups are similar to ACOs
• Scope: 100 agreements, 27 states, 1 million commercial customers, 39,000 physicians (including 19,000 PCPs and 20,000 specialists)
Metric CCAs Operational for 2+ Yrs. CCAs Operational for 1+ Yr.
% Meeting Quality Targets 73% (2% better than mkt. average) 63% (2% better than mkt. average) % Meeting Medical Cost Targets 73% (3% better than mkt. average) 50% (at par with mkt. average)
% Meeting Quality + Cost Targets 55% 37%
1.Sharing Useful Patient Information: sharing claims data with physicians 2.Predictive Modeling: identifying patients at risk for readmission to develop
post-discharge care plans, including HHC and physician outreach
3.Embedded Care Coordinators: for the management of chronic conditions 4.Communication and Collaboration: internal meetings to improve care coordination
and program management
5.Clinical Integration: alignment of case managers to physician groups and care coordinators
6.Aligning Incentives to Performance:pay for value reimbursement for achieving quality and affordability targets
ACO: Market view
Market
# of ACO
Contracts
Market Dynamic
New York 34 Large population base; physician comfort with population health & risk; multiple payer‐led ACOs
Boston 31 Consolidated IDN‐driven market with all major payers pursuing performance‐based contracts
Chicago 28 Leading IDN (Advocate) and leading payer (BCBS) both driving accountable care
Los Angeles 27 Large population base, organized physician groups comfortable with capitation
Phoenix 19 Banner Health has more separate ACO partners than any other IDN in U.S.
San Francisco 19 CalPERs, payers, hospitals & physicians all driving ACOs Pittsburgh 3 Dominance of 2 large systems has tamped down ACO activity Kansas City, Mo. 3 Largely unconsolidated market lately has been consolidating Charlotte, N.C. 6 Loosely organized physicians uninterested in patient risk
Level of organization of health system is a predictor of ACO contracting activity
11 Source: DRG ACO database Population health ACOs are responsible for the entire health spend (with the exception of Part D for Medicare) so the costliest diseases to manage have gotten the most attention. Current focus Medicare Shared Savings Plans and Pioneers are focused on managing the diseases for which there are quality metrics: diabetes, heart failure, and chronic diseases such as high blood pressure and dyslipidemia. Emerging focus ACOs are starting to form to address specific disease states or populations: Oncology – Florida Blue and Baptist Health South ‐ Miami Pediatrics – University Hospitals Pediatric ACO ‐ Cleveland Congestive heart failure ‐ Oakwood ACO – Employees – Detroit End stage renal disease – under development by CMS
From the field “We have narrowed our focus to those (members) with two or more chronic conditions. As we saw more data, we learned that focusing on this population would do the most to make people healthier and, therefore, lower healthcare costs.” Darrel Ng, communications, Anthem BCBS of California
ACOs: Disease view
12 Source: DRG Research
Accountable Care Agenda
ACO and value-based landscape
ACO performance
Physician control
Looking ahead to the next generation of ACOs
13
First‐year results are underwhelming
for MSSPs
Domain # of measures Details
Patient/caregiver experience 7 Surveys measuring physician and system performance
Care coordination/patient safety 6
CMS claims, NQF and AHRQ standards for COPD, asthma, CHF, medication reconciliation
Preventive health 8 Screens (mammography, depression, etc.) using NQF and NCQA standards
At-risk population/frail elderly health 12
Management of diabetes, hypertension, heart disease using NCQA, NQF standards
Of those operating in Year 1 (2012), only one‐ fourth, or 50 of 223, achieved savings on their assigned beneficiaries Largest gain was $57.83 million from Memorial Hermann in Houston Other large savings came from Palm Beach ACO with $39.6 million, Catholic Medical Partners in NY with $27.9 million and Southeast Michigan ACO with $24.7 million Medicare ACOs must meet the quality standards from above to be eligible for sharing in savings on their beneficiaries ACOs are judged financially on whether they best the benchmark, which is based on Parts A and B expenditures for the Medicare population had there been no ACO Each year, the ACO’s per capita, risk‐adjusted Medicare expenses are compared to the updated benchmark Rules of the Road Source: CMS, released September 2014
Financial view
14Pioneers also struggling … depending
on who you ask
Sources: CMS, DRGThe bad news
19 Pioneers will operate in 201523 32
9 Pioneers dropped out of the program after Year 1 results
2 completely, while 7 shifted to MSSP
In 2014, another four dropped out
Pioneers have more risk, transitioning to a shared‐risk and shared‐
loss model for the current performance year
Drop‐outs cited difficulty in realizing savings based on CMS
benchmark methodology
The (mostly) good news
Year 1 total savings: $87.6 M Year 2 total savings: $96.0 M Year 1 savings to ACOs: $76 M Year 2 savings to ACOs: $68 M Year 1 13 ACOs shared in savings Year 2 11 ACOs shared in savings Year 2 2 ACOs posted losses Year 2 3 ACOs posted lossesAltogether, MSSPs
and Pioneers have
recorded savings of
$372 million so far
15Pioneers have improved quality scores
Quality Measure Domain Year 1 Year 2
Patient /caregiver experience 83% 86% Care Coordination/patient safety 61% 71% Preventive health 70% 80% At‐risk population 67.5% 83%
Average quality score by domain
Pioneers improved on 28 of 33 quality measures from Year 1 to 2 Of the 23 ACOs that remained in the program for Year 2, all but one improved its overall quality score Higher quality scores so far do not necessarily correlate to higher financial rewards One explanation is the higher‐quality ACOs tend to be in areas already relatively healthy, thus pushing down their potential for savings The largest improvement was with the at‐risk population measures, which strike at the core of ACO success in managing chronic diseases. Source: http://www.brookings.edu/blogs/up‐front/posts/2014/10/09‐pioneer‐aco‐results‐mcclellan#recent_rr/ 16The largest commercial ACO seeing
encouraging performance
4,000
physicians
in BCBS of
Illinois
PPO
network
1.4% reduction in inpatient admission rate
0.3% increase in inpatient days versus
4.7% for rest of hospitals in PPO network
2.5% overall lower costs for
Advocate/BCBS of Ill. ACO versus rest of
PPO
Source: http://www.modernhealthcare.com/article/20140122/INFO/301229994, as of January 2014 17
Accountable Care Agenda
ACO and value-based landscape
ACO performance
Physician control
Looking ahead to the next generation of ACO
Nearly 30% of ACOs are physician
controlled
848 ACOs
848 ACOs
848 ACOs
244 244 227 227 222 222 Excludes hospital, payer-led ACOs Excludes non-Medicare ACOs Excludes Pioneer ACOs 79 are 2 or more years old 165 are less than 2 years oldThe vast majority
of physician‐
controlled ACOs
are Medicare
Shared Savings
Program (MSSP)
types
Source: DRG ACO database, as of October 2014 19More than 100 ACOs are jointly guided
by payers, physicians
848 ACOs
848 ACOs
848 ACOs
322 322 113 113 95 95 Includes only physician/payer ACOs hospital organizer Includes only ACOs with no hospital organizerIncludes only those sharing in savings Source: DRG ACO database, as of October 2014
A small
number are
at global or
shared risk
20From large to small, ACO gains are
difficult to come by
Physician‐led ACO
Location
Boston
Yuma, Ariz.
Type
Pioneer, commercial
MSSP
Founded
2012
2013
# of physicians
1,000 in six
independent medical
groups
12 listed on
Web site
First‐year
Medicare
performance
$2.44 million loss
Did not share in savings in Year 1
ACO initiatives
COPD program,
reducing SNF costs,
chronic kidney disease
Still in progress
Sources: CMS, /www.ehcca.com/presentations/acocongress4/brower_1.pdf 21How did physician‐led Pioneers
perform versus system‐led?
• 3 of 6 had savings
• Best: 5.4% and
worst: ‐1.2%
Physician
Led
• 8 of 14 had savings
• Best: 7% and worst:
‐5.6%
Health
System
Led
Performance in Year 2
Source: CMSN = 23
11 with
shared
savings; 9
not and 3
not
reporting
22Even with mixed results of Pioneers,
more on the way
• New round of Pioneers likely to be named for 2015 by CMS
• Yet some providers remain skeptical
– “Organizations are not gravitating toward the Pioneer ACO model
because the downside risk is not outweighed by the opportunity for
economic gain‐the business case is not compelling.” – Dr. Richard
Gilfillan, CEO of CHE Trinity in a comment letter to the CMS
• Providers concerned about potential for loss
– Want financial rewards to be larger
– Also suggest patients be able to choose their own ACO rather than be
attributed through PCP
– Also concerns about the way benchmarks are used for computing
financial gains or losses
Source: http://innovation.cms.gov/resources/ACOEvolutionRFI.html 23What is life like for physicians in an ACO?
Sources: DRG Research, http://www.hfma.org/Content.aspx?id=25338&
Rules of engagement (Nebraska example)* As little as 5% or as much as 20% are common amounts of compensation that are at risk for meeting ACO goals of efficiency, patient outcomes Most physicians are paid FFS with bonus reconciliation at the end of the year or year Minority of physicians in bundled payment or capitation systems Adherence with ACO protocols (80% equals opportunity for bonus) Increased use of generic medications Decreased emergency department utilization Decreased out‐of‐network referrals Installation of EMR Financial incentives ACO distinctions Some require physicians meet a portion of measures to get bonuses Others require so‐called quality gates be passed through
One Pioneer ACO created a health risk assessment form for all assigned patients. Physicians receive $100 for each HRA filled out. Physicians are eligible for the first 20% of savings.
Accountable Care Agenda
ACO and value-based landscape
ACO performance
Physician control
Looking ahead to the next generation of ACOs
25
