Franke, the Amita ACO's CEO, has high hopes for a proposed overhaul to the Shared Savings Program that the CMS announced in August called Pathways to Success, which the agency said would move ACOs into risk faster. In a news release, the CMS said that ACOs wind up increasing Medicare spending in aggregate. Pathways to Success, by contrast, would save Medicare an estimated $2.2 billion over 10 years by creating two tracks: one basic and one enhanced, akin to Track 3 of the Shared Savings Program. ACOs would only be able to remain in one-sided risk for two years under the proposal, versus the current six.
Rather than move into Track 3, Franke said he likes the idea of staying in the basic track of Pathways, which would keep the ACO's risk effectively the same as it is today. If that wasn't an option, he said he'd also consider taking on risk through a Medicare Advantage plan, given that the Chicago market has room to grow in that area. The CMS has said it wants to launch an experiment that allows doctors in Medicare Advantage plans to qualify as participating in an alternative payment model, or APM.
Melinda Durr, a partner in consultancy Oliver Wyman's health and life sciences practice, said taking on risk on behalf of a Medicare Advantage plan might be a good transition for providers moving out of the Shared Savings Program because it's the program of choice for many seniors, especially those coming from commercial insurance who understand managed care.
“There is the opportunity for a win-win in terms of providers assuming risk on the part of Medicare Advantage plans and payers allowing providers to do that,” she said. “Because they can better manage the outcomes their patients are receiving.”
Some ACO leaders say the fact that Medicare patients don't have to be assigned primary-care providers and don't need referrals to see specialists makes it tough to manage their care under the Shared Savings Program, especially if they frequently see doctors outside of the network.
The Health Care Transformation Task Force's Micklos said ACOs today have greater flexibility than in the past to offer incentives for getting care from particular providers—such as through high-value networks or even gift cards—while preserving beneficiaries' freedom of choice.
Executives with the Aledade Delaware ACO have overcome that problem by making sure its physicians understand and agree to its strategy around referring to in-network specialists and keeping patients informed about the importance of staying in-network. That's led to strong partnerships with local specialists, said Blanchard, the ACO's executive director. A cardiology practice even opened up a separate phone line just for those ACO patients who need urgent access, he said.
At the Amita ACO, that issue is addressed through patient education, including on the importance of having a primary-care provider who knows what tests a patient needs, for example.
“It's not a forced relationship, but based on the data, it becomes apparent,” Franke said. “In a majority of the patient cases we can see who they rely on for most of their primary care, and we just try to formalize that by reaching out to the patient, engaging them with annual wellness visits and conversations.”
When it comes to taking on more risk, ACOs tend to focus on the amount they'd lose in a worst-case scenario, but that's unlikely to happen. When MyHealth First Network, an ACO serving 13 counties in western South Carolina, considered moving from the Shared Savings Program's Track 1 to Track 1+, it faced potential downside risk of up to $15 million, said Valinda Rutledge, vice president of public payer strategy for SC Health Co., the health system formed through the union of Greenville Health System and Palmetto Health in South Carolina.
“It sort of takes your breath away,” she said, “and so your immediate, gut-level reaction is, 'Oh my heavens, we don't want to do that.' ”
But once the health system combed the data and learned how unlikely it would be to perform that poorly, its leaders felt more comfortable, Rutledge said.
A few ACOs are taking the unique step of reinsuring the risk they're assuming in APMs using commercial insurance policies, although most ACO leaders interviewed weren't familiar with such policies. Leavitt Partners' Muhlestein said few ACO leaders are savvy about buying such policies, although they could help the organizations move toward risk before they have significant experience doing so. Micklos agreed they could be useful, but haven't gained much traction yet.
One reason the ACO Accountable Care of Nevada felt comfortable moving to Track 3 of the Shared Savings Program was because it had secured a commercial insurance policy that covers all of the downside risk it's taking on under the program, said Dr. Navneet Sharda, the ACO's CEO. He said the ACO's physicians decided to move to Track 3 after about three years of success in Track 1 because the majority of them felt it might be more lucrative. He declined to say which insurer the policy is through, but said the physicians probably wouldn't have been willing to take on the risk of Track 3 without it.
“Most of the doctors are very risk-averse,” he said. “Doctors just don't take risk.”