Dr. Craig Burrows, a rural provider for 17-bed Mammoth Hospital, has to make a decision: Should Mammoth participate in a downside-risk track in the Medicare Shared Savings Program next year and be on the hook for penalties or should Mammoth take an opportunity to continue in the program without being responsible for any losses?
Burrows says he’s confident the accountable care organization that Mammoth is part of, with 3,900 clinicians and 30 community hospitals systems, would perform well enough to avoid losses. But Mammoth officials are still considering a risk-free opportunity from Caravan Health, a healthcare consultancy.
Next year, when many ACOs are required to take on downside risk in light of new regulations from the CMS, Caravan Health, which supports 12 ACOs, has agreed to shoulder all penalties for the rural participants should they lose money in the program.
“If there are losses, then it’s on us, but there aren’t going to be losses,” said Lynn Barr, the firm’s founder. “We are taking a fear off the table.”
The unique offering is a response to concerned comments from Caravan’s rural customers that they would leave the program if forced to take on risk, Barr said.
Burrows said the option is an appealing one. He’s the chief medical officer at Mammoth Hospital, a critical-access facility in Mammoth Lakes, Calif., that has participated in the ACO program since 2016. Although the hospital is in an upside-only track of the program this performance year, leaders are considering a downside-risk contract next year.
Burrows said he’s certain the ACO, which has 112,000 attributed beneficiaries, won’t have losses should they take on risk, but Mammoth would still look at the offer to be off the hook for losses.
“We’ll consider it,” he said. Among the questions that will be asked is if it will make a difference for Mammoth Hospital one way or another considering the ACO is certain it won’t have losses, he said.
Since the announcement, Barr said Caravan is no longer hearing from rural providers that they’ll leave the program.
While Caravan, one of the consulting firms typically called ACO enablers, is taking on all the downside risk for some of its customers, other companies have long baked into their business model that they will take on some of it, sometimes half or more, depending on the ACO.
As a result, some leaders of these firms said they are seeing an uptick in independent physicians already participating in the Medicare program interested in joining them as they are forced to shoulder downside risk soon or drop out.