Universal American, the Medicare managed-care company that quickly moved into Medicare accountable care, continues to scale back its participation in ACOs, but has grown more aggressive with remaining accountable care efforts.
Universal American now operates 22 Medicare accountable care organizations in joint ventures with physicians, down from 24 last year and 34 in the program's first years. The publicly traded insurer continued to lose money on the Medicare accountable care contracts in 2015. Universal American cut back its ACOs “to focus our resources only on those ACOs where Medicare shared-savings can work and where we can truly impact the cost and quality,” Richard Barasch, the company's CEO, told analysts.
Universal American reported a loss of $20.1 million on revenue of $20.9 million for its ACO business last year. That's compared with the loss in 2014 of $30.8 million on revenue of $13.4 million.
The segment accounts for a sliver of the company's overall revenue, but the company is one of the largest operators of Medicare ACOs and policymakers are closely monitoring ACOs' results.
Last year, Universal American reported a net loss of $164 million on revenue of $1.49 billion. That's compared with a net loss in 2014 of $29.5 million on revenue of $1.6 billion.
The company's exit from more ACOs, however, did not prevent the company from entering into more aggressive accountable care options, including the Next Generation ACOs. Medicare offers ACOs less-risky options and more sophisticated ones with higher financial payouts but greater financial risks. Next Generation ACOs, which launched in January, are riskier but relax some rules.
Universal American has 15 ACOs in the less-risky option and seven in more sophisticated options, including one Next Generation ACO.
“We believe this is the aspirational model for the rest of the Medicare ACO program,” Barasch said.