New Medicare ACO to be unveiled soon

The government's top health insurer has announced that providers could get a first look at a new type of Medicare accountable care organization this month. It has been modeled closely after a controversial managed care program and includes new waivers for skilled nursing facilities.

While nursing homes aren't likely to be transforming their operations en masse under an ACO model anytime soon, experts say they need to be trending that way and advise them to keep a close eye on new developments. ACOs are groups of clinicians and providers that voluntarily give coordinated, high-quality care to Medicare patients. Brought to life through the Affordable Care Act, ACOs distribute cost savings among members.

The new healthcare model, which may be dubbed the Vanguard ACO, will encourage greater participation by allowing providers to make the investments necessary to coordinate patient care, said Patrick Conway, the Center for Medicare & Medicaid Services' deputy administrator for innovation and quality and chief medical officer. He added that the new ACO would offer a financial benchmark for providers that likely resembles the one in Medicare Advantage, the managed care program scrutinized heavily for upcoding issues and which the president has proposed cutting $36 billion in funding from over the next 10 years.

Conway made the remarks during a special event sponsored by a bipartisan group known as Fix the Debt. At that event, the group released a report titled “Medicare Slowdown at Risk: The Imperative of Fixing ACOs.” The document argues that CMS should consider reforms that improve the financial structure of, and retain participation in, the ACO program, according to published reports.

The president's proposed 2016 fiscal budget, which would cut $100 billion from post-acute provider inflation updates over the coming decade, would incentivize nursing homes and home health agencies to deliver care more efficiently through the accountable care organization model.

A CMS rule proposing sweeping changes to the Medicare accountable care model offers few incentives and could dissuade greater participation, 34 leading healthcare organizations and industry groups stated recently in a joint letter to CMS. The groups urged CMS to establish a more appropriate balance between risk and reward; adopt payment waivers to eliminate barriers to care coordination; modify the current benchmark methodology; provide better and timelier data; and strengthen the assignment of Medicare beneficiaries.