ACOs for specialty providers could be key to Medicare savings
Providers saw promising savings from accountable care organization models over the last year, and recent data has shown the value-based programs could find more success in a relatively untapped area: specialty medicine.
The CMS last week quietly released data showing that three ACO programs saved providers millions of dollars. Last year, the Comprehensive End-Stage Renal Disease Care Model saved $75 million, according to the agency. That's more than the $68 million saved by Pioneer ACOs, and the $48 million saved by NextGen ACOs in the same period.
Pioneer and NextGen ACOs mainly focused on better coordinating the primary care needs for Medicare patients.
"These findings support the need for more specialty payment models," said Christopher Huryn, a healthcare lawyer at the law firm Brouse McDowell. "The most potential savings exist in the medical specialties that provide, and in the patient populations that require, the most costly care."
Most value-based pay models available now target only primary care services, leaving few options for other providers to earn bonuses if they improve quality of care for patients while lowering costs.
But the 2016 results show there could be untapped potential for specialty- and disease-focused ACO models.
"The big saver, by far," was the [ESRD model], said David Muhlestein, chief research officer at Leavitt Partners. "Perhaps there is more opportunity to focus on disease-specific programs."
The ESRD model may have outperformed other ACO programs because participating providers knew upfront that they were accountable for specific patients. In other ACO models, patients are retroactively assigned to the programs at the end of the year, Muhlestein said.
The CMS launched the renal disease ACO model after seeing rising costs of care for Medicare beneficiaries with end stage renal disease. Between 2013 and 2014, Medicare fee-for-service spending for beneficiaries with end-stage renal disease rose 3.3%, from $31.8 billion to $32.8 billion, accounting for 7.2% of the overall Medicare paid claims costs.
These individuals typically have many health problems, are at higher risk of hospital readmissions and suffer from fragmented care, the agency said.
Providers could find financial success using an ACO that targets specific cardiac procedures, according to Dr. Keith Naunheim, chief of cardiothoracic surgery and a professor at Saint Louis University School of Medicine.
In 2012, direct medical costs for heart failure in the U.S. totaled $20.9 billion, and that's expected to hit $53.1 billion by 2030, according to researchers. Congestive heart failure was the most common condition for Medicare readmission in 2014, with 134,500 beneficiaries rehospitalized for a total cost of more than $1.7 billion, according to HHS' Agency for Healthcare Research and Quality.
While primary care providers must track a variety of ailments for each patient, cardiologists' work is more targeted and that makes it easier for them to track quality of care, Naunheim said.
Cardiologists and heart surgeons want to be rewarded for improving the quality of care for patients while lowering costs, much like their primary care colleagues. But the CMS has proposed canceling three incentive payment models targeting coronary artery bypass and cardiac rehabilitation that were scheduled to begin on Jan. 1, 2018.
If that decision is finalized, cardiac providers won't have any alternative pay model of their own to participate in, according to Richard Prager, president of the Society of Thoracic Surgeons.
Despite an interest in value based models, not all cardiac providers are interested in an ACO, and instead would prefer a bundled-payment model like those that are facing cancellation. Those models are more procedure-based and track the health outcomes of a patient post-surgery, according to Dr. William Borden, chief quality and population health officer at George Washington University Medical Faculty Associates.
That post-acute care component doesn't exist in the ESRD model because dialysis care isn't surgically based.
Others feel the best course of action is to continue to incorporate specialists into more general ACO models as that will impact the most patients.
"Population-based models like the Next Generation ACO Model challenge providers of all specialties to collaborate in their communities to improve quality and drive savings in ways that challenge us to better overcome fragmentation where it may currently exist," said Aric Sharp, vice president of accountable care for UnityPoint.
An edited version of this story can also be found in Modern Healthcare's Oct. 23 print edition.
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