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Five Takeaways from NAACOS 2019

By Annette DuBard

Last week I had the opportunity to attend the National Association of Accountable Care Organizations Spring 2019 Conference in Baltimore, Maryland. Below are my top takeaways from the conference from sessions and speaking with other attendees. 

1. Payment reform is a top priority.

CMS Administrator Seema Verma opened the conference with an emphatic assurance that re-orienting our healthcare system around value, with a focus on payment reform, remains an urgent priority of the current administration. Strategies they intend to pursue include: promoting a multipayer environment by synchronizing models with private plans; encouraging states to align Medicaid with new payment models; improving risk adjustment and benchmarking methodologies, and empowering patients to choose high-value providers through greater transparency of cost and quality information.  

We can also expect continued efforts to promote interoperability and patient control of data, and to address regulations that are “barriers to value.” She specifically cited “outdated” aspects of Stark Law, and building on the progress of the Meaningful Measures Initiative which reduced the quantity of measures by 20% last year.

2. Primary care is a focal point for new payment models, but many questions remain.

Conference attendees were buzzing about the recent announcement of two new payment models under the CMS Innovations Center. The “Direct Contracting Model” envisions a capitated up-front payment for primary care services amounting to 7% of the expected total cost of care for the Accountable Care Organization’s (ACO) patient panel, while the ACO takes risk for 50% of savings or losses on total cost of care; or a full up-front capitation payment for total cost of care if the ACO takes risk on 100%. A third option is in development, where the ACO would take full risk and accountability for beneficiaries in a geographic region. 

Separately, the “Primary Care First” model will be available in 26 regions across the country. In this model, primary care services will be funded through an up-front risk-adjusted population-based payment to primary care practices, alongside a flat rate reimbursement for each office visit (regardless of complexity), and a quarterly incentive payment based on acute hospitalization rates. A practice would have the opportunity to increase practice revenue by as much as 50% by keeping patients out of the hospital, or face a penalty of up to 10% if hospital use rises. ACO experts fear that the “devil is in the details” as we await further clarification of benchmarking methodology.  

3. The Value-Based Payment landscape is getting more complex.

CMS continues to pursue payment reform for specialty care as well, and representatives from the American Hospital Association and American Medical Association emphasized the importance of physician leadership in the design of new models. Interactions between models can be quite complex. For example, if a patient in an ACO has an episode of care covered under a bundled payment program, does one model win over the other for patient attribution? For partial costs or all costs? Do bonus payments made under one model count as costs to the other? One speaker described the need for a “patchwork of incentives to bind everyone together,” while acknowledging that getting the mechanics right is the tricky part. 

Meanwhile, ACOs with specialist members are devising innovative ways to gain specialist engagement in the work of the ACO, incentivizing better referral communications, more efficient care pathways, and reduction of care variation or low-value services. CMS Administrator Verma put it this way, “The road to value must have as many lanes as possible.”

4. ACOs are gaining traction and success in commercial markets.

Several presenters discussed expansion of ACO focus into self-insured populations and commercial value-based contracts, with experienced ACOs taking on greater levels of financial risk and achieving financial success. Commonly cited challenges include less visibility into historical performance to inform contract design; reliability and quality of payer data; misalignment of quality measures across contracts; and difficulties getting a sufficient number of lives in the ACO for smaller payers. 

Commercial pharmacy spend was seen as both a challenge and an opportunity. Some ACOs have been able to generate substantial savings through pharmacy management programs, while others felt that payers should not put providers at risk for drug costs when the payer has much more effective levers for controlling costs through drug price negotiation and benefit design. On the bright side, there were examples of commercial payers engaging ACO input on value-based insurance design, and making strategic investments to address social determinants of health.

5. Opportunities in Post-Acute Care

While some themes this year around optimizing post-acute care were familiar, such as managing skilled nursing facility (SNF) length-of-stay through the use of preferred networks, others were more novel, such as the use of SNF 3-day stay waivers to achieve lower hospital costs. Preferred network engagement tactics included the use of technology and ACO liaisons to collaborate in real-time with skilled facility partners on individual patient care plans and discharge planning. 

In one region, multiple ACOs have collaborated to develop uniform standards and protocols with preferred SNF partners. ACOs are leveraging cloud-based communication tools to share information with SNF partners (such as ACO patient identification and Physician’s Orders for Life-Sustaining Treatment (POLST) forms) and receive facility admission, discharge, and transfer notifications. One presenter cited a 14% reduction in SNF spending and better care coordination resulting from these efforts. 

SNF 3-day waivers allow ACOs to identify appropriate patients for skilled facilities admissions without the 3-day “qualifying hospital stay” that Medicare traditionally requires. ACOs have leveraged the waiver for patients in the emergency department to avert a hospital stay, or to achieve a shorter hospital stay. Several attendees voiced that use of the waiver has been lower than anticipated due to operational and engagement challenges. We have not seen outcomes data, and very few tactics or strategies were offered for using the waiver directly from the community or office setting to avoid the hospital visit entirely. Still, discussion of SNF waivers was generally enthusiastic and optimistic as groups gain experience with their use.