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Small physician-led Accountable Care Organizations (ACOs) have shown success in reducing costs while improving quality. But they need more support to continue down that road, according to a new report.

Those ACOs would benefit from more guidance and support from the Centers for Medicare & Medicaid Services (CMS), private insurers and other sources as they take on greater financial risk and move farther away from traditional fee-for-service payments, according to a new report (PDF) from the Duke-Margolis Center for Health Policy.

Case Study

Across-the-Board Impact of an OB-GYN Hospitalist Program

A Denver facility saw across-the-board improvements in patient satisfaction, maternal quality metrics, decreased subsidy and increased service volume, thanks to the rollout of the first OB-GYN hospitalist program in the state.

See how

“ACOs, especially smaller ones and those in more resource-deprived settings, need additional support in building the organizational competencies (such as clinical care redesign and forecasting costs) to take on increased risk,” authors of the report, who conducted interviews with ACO leaders, concluded.

ACO leaders interviewed by researchers have concerns about meeting the new requirements of Medicare’s “Pathways to Success” program that shifts financial risk from CMS to ACOs more quickly, the report indicated. 

“By asking physician-led ACOs to take on more financial risk, CMS is trying to encourage better care at a lower cost,” said Robert Saunders, research director for payment and delivery reform at Duke-Margolis. “Transitioning to new payment models is always challenging, and CMS should do all it can to support smaller physician groups in joining effective ACOs at this pivotal time or risk their longer-term sustainability.”

Some of the challenges faced by small physician-led ACOS in taking on more risk include the structure of their ACO contracts—including the cost benchmark they are expected to improve on, their limited capital reserves and their need for advance investment and technical assistance, the report said.

The report noted that many small physician-led ACOs are partnering with third-party companies, what they called “ACO enablers,” such as Aledade, Caravan, Evolent and others, to access needed upfront capital and additional services to help them participate in risk-bearing models.

Others have dropped out of ACO programs at high rates in recent years, the report said.

CMS is pushing ACOs to more quickly transition to downside risk under its Medicare Shared Savings Program, or in new ACO-type programs, such as the Direct Contracting program or complementary programs, such as the Primary Care First program.

The report, which was prepared with funding from the Robert Wood Johnson Foundation, recommended three steps CMS can take to assist these ACOs:

  • Reduce regulatory burdens. For instance, ACO leaders interviewed by researchers said that regulations such as the Stark Law and Anti-Kickback Statutes limited their ability to coordinate and manage care effectively. CMS has proposed changes to both rules to provide greater flexibility for organizations in value-based payment arrangements
     
  • Provide more support for ACOs to develop technical capabilities. The report said CMS can identify and share successful strategies used by ACOs to improve the cost and quality of healthcare.
     
  • Simplify program rules. ACO leaders expressed difficulty keeping up with changing policies and priorities, the report said. Smaller organizations will be more likely to participate in new tracks or programs when the rules are certain and simpler to understand.

Small physician-led Accountable Care Organizations (ACOs) have shown success in reducing costs while improving quality. But they need more support to continue down that road, according to a new report.

Those ACOs would benefit from more guidance and support from the Centers for Medicare & Medicaid Services (CMS), private insurers and other sources as they take on greater financial risk and move farther away from traditional fee-for-service payments, according to a new report (PDF) from the Duke-Margolis Center for Health Policy.

Case Study

Across-the-Board Impact of an OB-GYN Hospitalist Program

A Denver facility saw across-the-board improvements in patient satisfaction, maternal quality metrics, decreased subsidy and increased service volume, thanks to the rollout of the first OB-GYN hospitalist program in the state.

See how

“ACOs, especially smaller ones and those in more resource-deprived settings, need additional support in building the organizational competencies (such as clinical care redesign and forecasting costs) to take on increased risk,” authors of the report, who conducted interviews with ACO leaders, concluded.

ACO leaders interviewed by researchers have concerns about meeting the new requirements of Medicare’s “Pathways to Success” program that shifts financial risk from CMS to ACOs more quickly, the report indicated. 

“By asking physician-led ACOs to take on more financial risk, CMS is trying to encourage better care at a lower cost,” said Robert Saunders, research director for payment and delivery reform at Duke-Margolis. “Transitioning to new payment models is always challenging, and CMS should do all it can to support smaller physician groups in joining effective ACOs at this pivotal time or risk their longer-term sustainability.”

Some of the challenges faced by small physician-led ACOS in taking on more risk include the structure of their ACO contracts—including the cost benchmark they are expected to improve on, their limited capital reserves and their need for advance investment and technical assistance, the report said.

The report noted that many small physician-led ACOs are partnering with third-party companies, what they called “ACO enablers,” such as Aledade, Caravan, Evolent and others, to access needed upfront capital and additional services to help them participate in risk-bearing models.

Others have dropped out of ACO programs at high rates in recent years, the report said.

CMS is pushing ACOs to more quickly transition to downside risk under its Medicare Shared Savings Program, or in new ACO-type programs, such as the Direct Contracting program or complementary programs, such as the Primary Care First program.

The report, which was prepared with funding from the Robert Wood Johnson Foundation, recommended three steps CMS can take to assist these ACOs:

  • Reduce regulatory burdens. For instance, ACO leaders interviewed by researchers said that regulations such as the Stark Law and Anti-Kickback Statutes limited their ability to coordinate and manage care effectively. CMS has proposed changes to both rules to provide greater flexibility for organizations in value-based payment arrangements
     
  • Provide more support for ACOs to develop technical capabilities. The report said CMS can identify and share successful strategies used by ACOs to improve the cost and quality of healthcare.
     
  • Simplify program rules. ACO leaders expressed difficulty keeping up with changing policies and priorities, the report said. Smaller organizations will be more likely to participate in new tracks or programs when the rules are certain and simpler to understand.