In existing Medicare ACO rules, groups were able to take as long as 6 years before they were required to assume any downside risk.
The result? We saw a significant influx of groups into ACOs. Many groups chose to create or join existing ACOs despite not being fully prepared or organizationally ready to take on risk, assuming there was plenty of time before they needed to materially tackle dealing with said risk. A strong incentive to hastily create these ACOs was further provided when CMS allowed groups to NOT participate in MIPS/MACRA if they identified as a Medicare ACO. The result? Medicare found themselves in a classic “quantity” over “quality” dilemma. ACOs rapidly formed, yet provided no impact on the success of the ACO program as it related to cost reduction and outcome improvement. This provided mounting evidence that whether or not groups took on risk correlated with outcomes, and that groups who took on no risk, had lackluster results with little to no impact on the cost of care.
In a strong sign of continued commitment to the value-based model, CMS recently proposed a new rule which will clearly shift the pendulum from “quantity” to “quality.” CMS acknowledges that this may result in less groups forming ACOs and such, they anticipate ~100 less ACOs than the current count, yet believe the remaining ACOs (or those that will newly form) will be shifted to risk faster and more intensely that the desired outcomes will follow.
This shift to assuming early risk is likely to drive heightened adoptions of fully matured comprehensive Population Health Analytics platforms such as the NextGen Population Health platform because the stakes are increasing at a rapid rate. For an ACO to thrive while taking on risk, they will need robust capabilities in two key areas:
- Predictive Analytics that allow an ACO to proactively identify and engage the patients who pose the most financial risk in the upcoming year.
- Ability to monitor resource utilization and practice pattern variation in real time, as well as performance against budget. With this, groups can assure they are on budget target and will not face financial jeopardy at the end of the year.
These focus areas require a sophisticated platform that incorporates and integrates multiple data sources, as well as fully integrates cost and clinical data by analyzing adjudicated claims data.
With the new rule, it appears risk-bearing ACOs are here to stay and the need for Population Health solutions to provide data-driven insights has never been clearer.
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