The Role of the ACO in Commercial Gain Share Contracts
By Alex Blum and Travis Broome
The Affordable Care Act (ACA) has created a movement to change the way doctors can be paid; now physicians get paid if they can put in place processes to improve the health of their patients and proactively reach out to their sickest patients. Gain share contracts allow physicians to share in the “gains” of keeping their patients healthy and their cost down. Physicians’ salaries increase now when their care improves the health of their patients. And this payment reform has happened both for Medicare and private insurance payers.
One of the first tenets of our work at Aledade is that all patients benefit from the combination of a strong primary care relationship and population health. Delivering higher quality of care at a lower cost is beneficial for everyone and the quicker payers recognize primary care physicians as partners in that value equation the better for patients, the better for physicians, and the better for society.
Aledade helps independent providers navigate the complexity of commercial contracts, obtain gain share contracts for all their patients, and allows providers to improve their workflows so they can drive down the cost of commercial patients while improving overall health.
This week, we are pleased to announce that Aledade and our partner physicians now have nearly 50,000 commercially insured patients in value based contracts. We are announcing the completion of four gain share contracts with payers in states across the country: West Virginia, Florida, Louisiana, and Kansas. These contracts include Blue Cross and Blue Shield organizations, as well as a state employee self-insured group. Understanding how we got to this point and accelerating accountable care adoption is key to increasing the value of health care for everyone in the country.
Accountable care is at the heart of the transformation of health care promoted by the ACA. The ACA created the Medicare Shared Savings Program and turned Medicare into an accountable care leader. The impact of Medicare embracing accountable care has been profound. In January 2015, the federal government established a 50/90 initiative: a set goal to have 50 percent of Medicare patients in alternative payment models and 90 percent of Medicare fee-for-service payments in value-based purchasing by 2018.
Many commercial payers quickly followed with their own announcements: In March 2015, Cigna committed to the value-based payment goals set forth by HHS, and UnitedHealthcare currently delivers $49 billion in care annually through value-based contracts, or one-third of its total payments, with a goal to raise this amount to $65 billion by 2018. Today, every major national payer has established corporate goals to move their fee-for-services payer contracts to value-based contracts.
In the effort to translate the high-level goals into detailed gain share contracts, payers have developed gain share contracts that bear little resemblance to each other. Our providers are driven by the singular desire to improve their patients’ health, but most of the commercial gain share contracts we review typically have disparate quality measures. It is near impossible for small, independent providers to monitor their performance across quality measures that differ for each patient in their busy schedule. For example, one contract we reviewed included nearly 30 quality measures, yet another contained only nine measures. In addition, most payers use validated HEDIS quality measures, but many payers use “home-grown” measures that are not validated.
There is also significant variation among the key financial terms of each commercial payer contract. This lack of alignment of contract terms presents a barrier to providers negotiating gain share agreements with commercials payers. Add to that the complexity of gain share contracts – and it makes it difficult for an independent primary care provider to negotiate directly.
Yet, when we meet with commercial payers we are almost always met with a willing partner; private payers also want to empower primary care providers to drive down the cost of improving the health of their patients. Aledade offers a unique partnership opportunity, working with independent primary care physicians on workflow, population health and whatever they need to succeed in creating value. Research shows that independent physicians are the provider type most likely to keep costs down (as compared to providers aligned with health systems). At the same time, we are committed to working with the broader payer community to optimize and standardize accountable care design in the commercial space.
Our independent providers are hungry to move all of their patients, not just their Medicare patients, into gain share contracts that can account for patients’ total cost because at the end of the day they are all their patients. Nearly every week we connect with a new payer partner who shares the same goals for better value for the nation’s health care dollar. We look forward to continuing to work across the country with physicians, payers and patients to improve health and health care value.