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Peering Into 2016: Five Major Questions We’d Love to See Answered this Year

January 4, 2016
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U.S. healthcare faces many significant questions, as we begin a new year. Here are five worth pondering.

Being a film buff, I can’t help myself: I’ve often found myself quoting Bette Davis’s character, Margo Channing, in her classic line in the 1950 Joseph L. Mankiewiecz movie “All About Eve”: “Fasten your seatbelts, it’s going to be a bumpy night!”

Well, to be honest, it’s been a bumpy past several years for most healthcare professionals in the United States, and there’s no real reason to believe that things will get measurably easier in this new year or even in the next few years. On the other hand, things have become somewhat clarified on a policy level, and there is justification for guarded optimism in certain areas, even as there is equally good reason for concern in some others.

All that having been said, it will be interesting to see whether several questions have been answered by the end of 2016. Below are some that I know I, for one, would like to know the answers to, this year.

  1. Will CMS fix some of the measurement-related problems in the Pioneer ACO program?

Here’s a very basic question: shouldn’t officials at the Centers for Medicare & Medicaid Services (CMS) be worried about the growing number of departures from the Pioneer ACO program? One would think they should. And yet the departures continue, even as providers’ complaints about that program remain unaddressed. As I noted back in November, “When the Boston Globe reported on November 3 that two Massachusetts healthcare organizations—the Boston-based Steward Health Care System and the Brighton-based Mount Auburn Cambridge Independent Practice Association (MACIPA)—were leaving the Pioneer ACO Program, that dual development became the latest in a series of worrisome developments around what had started out as a showcase program for innovative accountable care organizations (ACOs).”

What’s more, as I stated, “Indeed, the launch of the Pioneer ACO Program, even more than the launch of the Medicare Shared Savings Program (MSSP), both sponsored by the Centers for Medicare & Medicaid Services, under terms of the Affordable Care Act (ACA), had created a frisson of excitement at its inception back in 2012. And even on August 25, 2014, CMS officials were able to crow about some of the results coming out of the Pioneer ACO Program, when they announced on CMS’s website” some impressive results.

But with the number of Pioneer ACOs now down to half, shouldn’t CMS officials be rethinking at least some elements of the program? After all, it is the most high-profile of the ACO programs being managed under Medicare; and let’s face it, should the Pioneer program collapse, it would create uncertainty in the industry, even as the Medicare Shared Savings Program for ACOs (MSSP) continues to grow in participation, and as the Next-Generation ACO Program gets off the ground.

But Pioneer is the “diamond-level” federal ACO program, and naturally, has garnered a large share of the attention, and for good reason, particularly since its participants are organizations that are all already known nationally as industry leaders in delivery organization innovation and effectiveness.

The thing is that some of the fixes that would be required to stanch the anticipation loss seem like reasonable, not-incredibly-difficult changes to make. The best example here seems to me to be around the departure of Sharp HealthCare from the Pioneer program in the summer of 2014.

As Alison Fleury, senior vice president, business development, at Sharp HealthCare, and one of the most senior executives in Sharp’s former Pioneer ACO, told me a year ago now, Sharp’s departure was based on very brass-tacks issues—primarily around how CMS calculates labor costs.

As I reported in a blog last January 7, Fleury told me this:  “Sharp is the largest provider in San Diego County, and we’ve been in risk contracts for 30 years. We had been in the commercial risk market prior to entering the Medicare risk market. And when the Pioneer model came out, we were interested in the ability to work for population-based payment. We were actually advocating for that sooner rather than later. And we have two Medi-Cal groups, friendly competitors, if you will; and neither the Sharp Rees Staley Medi-Cal Group, nor the Sharp Community Medi-Cal Group, could have done this on their own.”

But one of the core problems with Pioneer, Fleury told me, was that “the benchmark model in Pioneer, different from that in the MSSP, uses a national benchmark, so the benchmark does not reflect labor costs in your individual market. Our area wage index went up  8.3 percent, but our payments didn’t go up. And the Pioneer includes a disproportionate-share formula, but MSSP doesn’t. And disproportionate-share is based on your Medi-Cal proportion”—as the Medicaid program is known uniquely in California.