White House Launches Medicare's Most Aggressive Accountable Care Effort Yet
The move away from fee-for-service Medicare forged ahead for 21 accountable care organizations entering a new more aggressive phase of a program that puts doctors and hospitals at even greater financial risk so they can improve quality, lower costs and potentially reap better pay.
The announcement by the Centers for Medicare & Medicaid Services about the number of participants in the “next generation” ACO model is significant because there had been concern some ACOs would lose interest or wouldn’t take on the more aggressive goals of the program. “In addition to being paid for positive patient outcomes (providers) will also receive penalties for negative ones,” the Obama administration said.
ACOs, which are proliferating across the country, put doctors, hospitals and a team of providers including social workers under the same umbrella to care for populations of patients. The ACO has a contract with Medicare to improve quality, lower costs and then keep any money saved from year to year based on the arrangement with the health plan.
In all, there are more than 475 Medicare ACOs across the country serving nearly 9 million Medicare beneficiaries since the so-called “Medicare Shared savings program” began in 2012 under the Affordable Care Act. The smaller number in the next generation program are taking on greater financial risks.
Unlike earlier ACOs that have contracted with Medicare, participants can take on more financial risk “up to 100%.”
“We are moving Medicare and the entire healthcare system toward paying providers based on the quality, rather than the quantity of care they give patients,” U.S. Secretary of Health and Human Services Sylvia Burwell said. “Americans will get better care and we will spend our healthcare dollars more wisely because these hospitals and providers have made a commitment to change how they do business and work with patients.”
The ACO program is all part of the Obama administration’s effort announced last year to shift 50% of Medicare payment to value-based models and away from fee for-service by 2018. Large health insurance companies are doing the same thing in the private sector led by UnitedHealth Group, Aetna, Anthem and Blue Cross and Blue Shield plans across the country that are shifting tens of billions of dollars in payments to value-based models like ACOs, medical homes and bundled payments to providers.
While there are challenges in reducing costs while at the same time improving quality, those involved with the “next generation” phase say they see more opportunities to provide more cost-effective options that will still provide Medicare beneficiaries better service.
For example, Universal American, which contracts with Medicare to provide health benefits to seniors, said it is covering telehealth consultations that an ACO in its network will use to keep beneficiaries healthy and at home.
“Telemedicine services received at a beneficiary’s home will be covered and allow physicians to offer care through telephonic, online and other electronic communications,” said Richard Barasch, chief executive officer of Universal American, which contracts with Houston-based Accountable Care Coalition of Southeast Texas, one of the 21 next-generation Medicare ACOs.
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