“It's meeting people where they are,” said Dr. Richard Gilfillan, director of the Center for Medicare and Medicaid Innovation, which has oversight of the effort, known as the Medicare Pioneer ACO Model program. Participants were named in December, and each selected one of five payment models with varying degrees of potential risk and reward. Gilfillan said the potential risk lies in their ability to produce better outcomes. “They're really betting on their ability to make dramatic improvements” to the care they provide, he said.
Accountable care under Medicare offers providers a financial incentive to meet quality targets and control healthcare spending for a specific group of patients.
Federal officials estimate the Pioneer ACOs will manage care for about 860,000 Medicare patients and save Medicare $1.1 billion over five years.
Gilfillan said different organizations have different tolerances for risk. Some are more integrated than others, he said. And each organization has its own view of how quickly it may progress. The various payment models allow Pioneer ACOs to choose a payment model, he said, and the approach allows the Innovation Center to “diversify” its opportunity to study accountable care.
The five options are:
- A “core” option (four ACOs) is the standard model and is neither the riskiest nor the most conservative payment model.
- Option A (two ACOs) is the safest choice, offering the least financial risk (and potential gain) in the early years.
- Option B (six ACOs) offers the most risk and potential gain in the first year of any payment model.
- Alternative 1 (12 ACOs, including Beth Israel) includes no risk for losses in the first year, but quickly grows more aggressive, with capitation in the third year for Medicare part B.
- Alternative 2 (eight ACOs) looks like the standard model for the first two years, but then switches to capitation for Medicare parts A and B.
Zysman said Beth Israel's physician organization will use the first year to add and expand programs, contract with new vendors and create jobs needed to manage care under the Medicare contract. “We are comfortable taking risk,” Zysman said. “We want to be successful. We expect to be successful.”
Federal health officials received recommendations on payment models during the year that led up to the Pioneer launch.
“I'd have to say that our thinking has been informed” by the Pioneer participants, Gilfillan said. The flexibility won't last, he said, “But we think it's the right way to start.”
Testing the models will help federal officials discover what works and establish standards, Gilfillan said. The diverse options will grow more uniform as Pioneer ACOs discover what works best, Gilfillan said.
The industry will see it coming and adapt to it, he said.