Delivery system reform hampers ACO progress on risk-based contracts

Accountable-care organizations are participating more and more in risk-based contracts, but that progress has been stalled by sluggish care-delivery changes, a new survey suggests.

Roughly 50% of ACOs are involved in at least one downside risk contract, such as shared savings and capitation contracts, according to a Leavitt Partners and National Association of ACOs report recently published in Health Affairs. About 47% of ACOs plan to participate in shared-savings risk-based contracts in the next year or so.

However, ACOs are focusing mostly on “low-hanging fruit” strategies to save money and improve quality of care, which mitigates how well the organizations are able to perform in riskier contracts, the report said.

“Even though ACO providers say they are preparing for and assuming risk, the care delivery system is not advancing as quickly as the payment system reforms,” said Kate de Lisle, an author of the study and a senior analyst at Leavitt Partners. “In order for these payment models to be successful, providers need to change the way they deliver care.”

Most ACOs still largely focus on “first wave” care delivery changes like readmissions, emergency department use and chronic care management, the report said. ACOs haven’t yet tapped into other reforms that will also help them prepare for downside risk like behavioral health integration and medication optimization and management.

Behavioral health and medication management contribute to high healthcare costs, and ACOs farther along in the model have started to address those aspects of care, de Lisle said.

Approximately one-quarter of all ACOs, or 240, responded to the survey. The respondents ranged from urban to rural ACOs as well as physician-led, hospital-led and integrated ACOs.

The survey found that hospital-led ACOs are more likely to have a shared-savings contract with downside risk than a physician-led contract. About 48% of hospital-led ACOs said they currently had a risk-based contract, compared to 28% of physician-led ACOs. Physician-led ACOs might have stalled because they have fewer resources than large systems to secure the capital needed to participate in risk-based contracts, de Lisle said.

“Though the physician-led ACOs have fewer active shared-loss contracts, they are still planning to participate, they are just behind a little bit,” she said.

Previous research has even shown that physician-led ACOs are more likely to be successful in the model because they have a deep understanding of their patient populations, she added.

But delivery system reform hasn’t kept pace with payment reform. The CMS and other payers haven’t offered providers much of a road map for adopting changes to care management. As a result, physicians are trying many different tactics all at once to see what does and doesn’t work, de Lisle said.

That hasn’t stopped providers with several years of ACO experience from generating savings. A recent study from HHS’ Office of Inspector General found the 423 ACOs participating in the CMS’ Medicare shared-savings program reduced spending by about $1 billion in three years.

De Lisle encouraged providers to keep working at their ACOs and to not give up. “The longer you are working with these goals and align your system, you begin to figure it out,” she said.

The survey also revealed that ACOs spend an average of $1.1 million on care management, and nearly all ACOs — 95% — use care coordinators to help manage their patient population.

“Care coordinators are these Swiss army knife team members that can be used in a number of ways,” de Lisle said.

The ACO model is by the far the most popular in the push to value-based care. As of the first quarter of 2017, 923 private and public ACOs were in operation, covering more than 32 million patients, according to a June 2017 post in Health Affairs by Leavitt Partners.

“Because the ACO model has been the primary vehicle in value-based care, I think studying the ACO movement will allow us to better understand where we are on the broader spectrum,” de Lisle said.

By Modern Healthcare.

Hawaii Medicaid waiver seeks reimbursement for helping house the homeless

Hawaii has asked the CMS to help it care for chronically homeless people more efficiently by addressing a major social determinant of health: housing.

The state’s waiver asks for federal reimbursement for Hawaii’s efforts to help homeless Medicaid recipients find and maintain housing. Both states and providers are looking for new ways to address social issues that undermine patients’ health and care plans.

Hawaii wants to use federal Medicaid funds to appoint state employees to help people find housing and provide moving assistance to those beneficiaries, according to a pending waiver application now under CMS review. The state has one of the highest homeless populations in the country.

Hawaii also wants to be reimbursed for providing tenant support services, such as conflict management training between enrollees and landlords.

“We anticipate that by providing these services, we will not only reduce our health costs, but we will help reduce people suffering from chronic homelessness, which ultimately saves lives,” said Judy Mohr Peterson, the state’s Medicaid director.

The waiver doesn’t ask Medicaid to cover actual housing costs, which is prohibited by federal law.

Hawaii hopes to build off its success with the state-funded Housing First program that started in 2014. The initiative focused on helping homeless people in the Honolulu area, and helped decrease healthcare costs for people in the program from an average of $10,570 per client per month to $5,980 per client per month.

For doctors, stable housing means there is a greater likelihood patients will adhere to their medication regimen and comply with preventive care recommendations.

Many of Hawaii’s homeless have very poor health and suffer from issues including diabetes, renal failure and heart disease. These conditions need preventive care and ongoing monitoring to prevent longer-term, more challenging and costly medical care, like dialysis or amputations, according to Dr. Scott Miscovich, a family medicine practitioner in Kaneohe, Hawaii.

“Having a home or reliable location to find a complicated patient with multiple comorbidities allows for outreach including home health services or case management,” Miscovich said.

Other states like California, Maryland, New York, Oregon and Washington have convinced the CMS to pay for housing support service initiatives, but Hawaii’s waiver is unique. The state’s request targets people who are at risk or currently are homeless and also have significant health needs, according to Peggy Bailey, director of the health integration project at the Center on Budget and Policy Priorities.

“Providers often struggle with finding funding sources to pay for the intensive support services that keep people with significant behavioral or physical health needs in housing,” Bailey said. “Medicaid financing would make a huge difference in the state’s efforts to end homelessness.”

It’s unclear whether the Trump administration will approve the waiver. Other state waivers that included similar housing provisions were approved by the Obama administration, Bailey said.

HHS Secretary Dr. Tom Price has made clear he is looking to cut Medicaid spending. However, Hawaii officials hope that the long-term healthcare savings will be enough to get the request approved.

“Republicans would agree that if we have a better model that saves money that’s good,” said state Sen. Josh Green, who is also a practicing emergency room physician. “I hope that the administration will see this as an opportunity.”

The CMS will accepts comments on the waiver request through Oct. 17.