Accountable care organizations and their advocates welcomed an announcement from the CMS Thursday that the federal agency was creating a new model to serve a group of patients often considered the sickest and most expensive.
These patients are dual-eligible beneficiaries, who qualify for both Medicare, which covers the elderly and disabled, and Medicaid, which covers people with incomes below a certain threshold. The CMS's newest model will test whether accountable care organizations can reduce costs while improving care. For ACOs, it spells opportunity.
“We like it a lot,” said Clif Gaus, president and CEO of the National Association of ACOs, a group of 210 members, many of which already have contracts with state Medicaid programs. “Having Medicaid as a component of the ACO gives us a much more flexible range of services from which we can coordinate [patients'] care and improve quality,” he added.
In accountable care organizations, groups of providers, like hospitals, groups of physicians and suppliers, agree to take on financial risk — sharing in savings or losses, or both — in caring for a group of patients.
To date, the CMS has rolled out several ACO initiatives for Medicare beneficiaries, and at least 10 states have also rolled out Medicaid ACOs.
Until now, however, ACOs have not specifically served Medicare-Medicaid beneficiaries, whose care, in aggregate, costs more than that of other patients. In 2012, dual-eligibles constituted 18% of Medicare's beneficiaries, but nearly a third of total Medicare fee-for-service dollars went to their care, according to a June report by the Medicare Payment Advisory Commission.
Among the 433 ACOs serving 7.7 million beneficiaries in Medicare's Shared Savings Program, the percentage of dual-eligible patients ranges from 0.5% to 70.6%, according to 2016 Medicare data. The median proportion of dual-eligibles among those ACOs is 4.7%.
Across the U.S., nearly 10 million people qualified as dual-eligibles in 2011, according to the Kaiser Family Foundation. That number has likely grown in the past five years with the expansion of Medicaid under the Affordable Care Act.
With the new Medicare-Medicaid ACO, the CMS appears to be making a concerted effort to tackle challenges treating the country's sickest, most vulnerable patients — and bring down its cost of doing so — amid growing acknowledgement within the healthcare industry that dually-eligible patients present unique challenges for providers.
For years, Premier, the healthcare quality improvement company, has urged the CMS to create an ACO model specifically for dual-eligible beneficiaries, said Danielle Lloyd, the company's vice president of policy. “We have always thought that it would be beneficial to have a solidified program that brings that state into the model...to allow them to share in some of the savings as well.”
The CMS will pick up to six states for this test model, which states must apply to participate in. It will last three years, with the option for two one-year extensions, and can start at the beginning of 2018, 2019 or 2020, depending on when states and partner ACOs apply.
In choosing those states, the CMS said it would give preference to those with a low saturation of Medicare ACOs or with limited experience in Medicaid ACOs.
The ACOs, meanwhile, are subject to eligibility requirements of their own. They must be participants in Medicare's Shared Savings Program, which requires them to have at least 5,000 assigned Medicare beneficiaries, and must serve a minimum number of Medicaid beneficiaries. They will be required to report quality measures, which the state will determine and the CMS has to approve.
Patients stand to benefit, too, said Lloyd, because the payment structure of ACOs give them greater flexibility to focus on care not just inside clinics and hospitals but everywhere, including at home. “it really provides them an incentive to follow them across the care continuum,” she said.
Although taking on sicker, more expensive patients may seem to offer little benefit to any provider, that's not entirely true. ACOs are rewarded in part based on their level of improvement, and so in some respects, they have more potential to succeed if they start with sicker patients.
“With the higher cost, more ill patients, there are more opportunities to improve their care,” said Gaus. “I think it's actually a bigger opportunity for the ACOs to deploy their tools and their best practices.”
