Making a quality bet on ACOs a risky proposition

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James Berklan
James Berklan

If there's anything that's become clear about this ACO business lately, it's that it's not going to be as simple as A-B-C.

Accountable care organizations, as ACOs are known on their birth certificate, are the government's way of telling acute, long-term care and other providers to play nice together. If ACO members treat patients up- and downstream to produce cumulatively higher quality outcomes, they get to share government financial incentives. 

There are about 350 ACOs currently contracted with the Centers for Medicare & Medicaid Services. Feedback has been mixed.

The much-ballyhooed Pioneer program — targeted by CMS for elite providers — started with 32 organizations three years ago. In September, three more exited, reducing the total to 19. [Most organizations have opted for the less-risky Medicare Shared Savings Program (MSSP).]

That same week, Avalere Health released study results revealing that 59% of the organizations in the MSSP that achieved savings had below-average quality scores. Ironically, the only ACO that had to repay CMS showed better than average quality.

“Quality and financial performance were not very closely aligned,” Ellen Lukens, the vice president for post acute care at Avalere Health, told me. “It raised a question about the program: Is pushing quality of care driving lower costs? So far, it's a disconnect.”

However, weak ACO financial performances present a “great opportunity” for long-term care and other post-acute providers, Lukens believes. We'll know a lot more after CMS makes a huge release of ACO performance data this fall, possibly this month.

For now, it would be premature to consign ACOs as a failed experiment. High start-up costs, for example, have tamped down some initial efforts, and utilization patterns could be changing.

An off-hand almost-endorsement by American Health Care Association President and CEO Mark Parkinson recently emphasized the possibilities. Speaking at the annual meeting of the National Investment Center for the Seniors Housing & Care Industry, the former governor of Kansas offered that a couple of years ago, plans to serve dually eligible Medicare and Medicaid beneficiaries were “all the rage.”

“It doesn't appear to be working out,” he said. “I'd guess right now ACOs are in a better place to take over this market.”

Just don't count on finding out with certainty for quite a while.



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