It would be easy to fall into lazy thinking and imagine that most of the innovation in the development and forward evolution of accountable care organizations (ACOs) were taking place in large metropolitan markets long driven by managed care and risk-based payment. In fact, the reality is rather different, and a significant number of patient care organizations participating in the Medicare Shared Savings Program (MSSP) for accountable care are in markets that do not have such histories.
Indeed, one of the more successful organizations participating in the MSSP ACO program has been Coastal Carolina Health Care, P.A., based in New Bern, a smaller city located two hours east of Raleigh, N.C. Coastal Carolina, which cares for more than 30,000 patients, is a multispecialty physician group with 42 physicians and 20 mid-level providers, delivering care to patients in 11 locations. Leveraging the Touchworks EHR [electronic health record] solution from the Chicago-based Allscripts, the leaders at Coastal Carolina have been focusing on such important areas as expanding preventive care (such as ensuring that patients are reached out to proactively to get needed mammographies and colonoscopies. Physicians also use tools in the EHR to measure their own performance.
Among other accomplishments, the Coastal Carolina clinicians have:
- Obtained $1.7 million in shared savings payments from the Centers for Medicare and Medicaid Services (CMS) through their successful participation in the MSSP program
- Reduced emergency department visits by 10-15 percent in one year
- Reduced hospital readmissions by 10-15 percent in one year
- Reduced average costs per patient by 19 percent in one year, resulting in $1.2 milion savings
- Increased preventive screening rates, to levels of 91 percent for mammograms, 94 percent for pneumococcal vaccination, 88 percent for influenza vaccination, and 89 percent for colorectal cancer screening
- Improved clinical outcomes, including bringing down hemoglobin a1c levels above 9, from 18 percent of such patients, to 8.3 percent of such patients
What’s more, all of these accomplishments have taken place within the context of Coastal Carolina’s participation in the advance payment model within the MSSP program, a model that Stephen Nuckolls, the organization’s president and CEO, says has made it possible to participate fully and successfully in the MSSP.
Nuckolls spoke late last fall with HCI Editor-in-Chief Mark Hagland regarding Coastal Carolina’s forward evolution around accountable care. Below are excerpts from that interview.
You have 45 physicians—what is your total medical professional cohort?
Yes, that’s right. We’re a single tax identification number, with about 45 physicians and 15 mid-level providers, some part-time, so we’re 50 provider FTEs. We have about 11,000 attributed Medicare beneficiaries, which is a little above average. We’re also multispecialty—pulmonary, critical care, gastroenterology, cardiology, endocrinology, and neurology.
What made you decide to join the MSSP for ACOs?
I had followed the development of the Affordable Care Act, and there were six pages related to this [ACOs]. And I’ve always wanted to cut out the middleman, and this was a way to do that, to save money for taxpayers, and provide good value. And our group felt that in the long run, this would be the best thing for our patients, and good for us financially. So basically, we felt that if we could get our incentives aligned, that everything else would fall into place. And then the advance funding.
Type in advance payment model ACO, and there’s a two-page document on CMS’ website. But basically, we received a flat payment of $250,000, and then a payment of $36 per attributed beneficiary that was also paid upfront. And so since we had about 11,000 attributed beneficiaries, that came to $370,000, and then the third component was $8 per beneficiary per month, and we’ve gotten 27 payments for ongoing payments, covering for the first 21 months of the program.
We entered the program on April 1, 2012. In terms of what CMS officials do, they go back and adjust the benchmarks based on national growth, and any adjustments in beneficiaries attributed to a particular ACO.
What kinds of outcomes have you been able to document in the program?
In October, CMS released the quality measures, and I knew we were doing pretty well on them; we had implemented several changes in our office, and were tracking our progress. They released a ranking sheet with all 220; and one of my friends had his staff tabulate them. And I was pleased that overall, on the 33 quality measures, we ranked number three among the 220. Some of the measures we did particularly well on were some of the preventive screenings. In fact, on several measures, we ranked number one in the entire MSSP program, including mammograms (91 percent) and colonoscopies (89 percent). And that’s where having the Allscripts solution really helped us. We used the advance payment to fund the purchase of that system, and that really helped us do population health management.
What aspect of the solution particularly helped?
What really helped was the Touchworks point-of-care dashboard, coming from an add-on product, CQS, Clinical Quality Solution, to the EHR. For a doctor’s dashboard per day, it shows the tasks that need to be taken care of for a patient with diabetes, for example. Wee customized it to show a green checkmark showing that a task has been performed, or a red x, to show it hasn’t been done. Using that tool, we’ve empowered our staff members to take care of those things, and have charged them with taking action. And to do that, we had to add some more staff at the point of care in a number of our primary care offices. In fact, we found that in the offices where we made the biggest gains, we had added scribes. In one of our offices, three of our doctors are over 65, and are perhaps not as nimble as younger doctors might be. So the use of scribes really helped, and the doctors were able to finish their workday earlier and were also able to see a few more patients per day. So by adding that extra labor at the point of care and using this dashboard, we were really able to move our performance.
And in fact, we looked very average on quality before we started the ACO program. But the financial incentives provided by the ACO program have really helped us to focus on these issues.
So employing scribes has really helped, then?
Yes, though that strategy doesn’t work for every one of our doctors. If you have a newer doctor who doesn’t have that patient base, it doesn’t really make sense. And the individual doctors have to be receptive, too; a lot of it depends on how they document their notes. Change is difficult. But what helps is when you have the incentives aligned.
One other quality metric—we’ve focused on the process measures around prevention, etc. And we’ve seen strides there, but also in other measures—the percentage of diabetics with an a1c greater than 9. Years ago, we were very average on that measure. We were at around 18-20 percent in terms of diabetics with hemoglobin a1c levels above 9, three years ago; in fact, the average among ACOs in the MSSP program was 22 percent, and we got our rate down to 11 percent, and ended up finishing third-best in the program nationwide, for calendar year 2013.
You’ve also achieved significant financial savings, correct?
Yes, we were able to lower 30-day all-cause readmissions per 1,000 beneficiaries by 22 percent, from 151 to 118, in 2013; meanwhile, hospitalizations went from 318 overall in 2011 to 255 in 2013, for a drop of 20 percent.
This was over a two-year period?
Correct. Those numbers reflect measurement from the third base year of the program, 2011, to 2013. The average MSSP ACO started at 350, so our initial rate of 318 hospitalizations was already low compared to the 350 average rate, and our overall costs were 12-15 percent lower than average in the group. At the same time, our enrollees’ ED visits went from 620 per 1,000 in 2011 to 500 in 2013, for a drop of 11 percent. What’s more, the ED visits leading to hospitalizations among our covered lives went from 226 to 181, a drop of 20 percent.
What helped you and your colleagues achieve all this?
A number of things; the key one was having care coordinators work with our sickest patients. We spent more than 85 percent of our advanced payment payments from CMS on creating a care coordination department with 11 registered nurses and a supervisor. And we used that team to staff a 24/7 triage line, and equipped them with the software to manage that, and empowered the team to accommodate a next-day physician visit if that was what was needed to avert an ED visit. And often, the person on call would meet the patient at the doctor’s office the next day in the doctor’s office.
What have been the biggest lessons learned so far in all this work?
I think that the incentives of the program can work. To me, the big lesson is that, despite assertions to the contrary from its critics, and even in low-cost areas, the program can work. But unfortunately, the way the benchmarks were set in the program were not regionally adjusted. So despite all these gains, our costs dropped in the first nine months but then went up after that, so we were about a half a percentage above the benchmark, so we didn’t achieve savings. There was a Brookings Institution paper released last year in which the researcher noted something contrary to the final regulation that CMS issued, which equated high-cost areas with high growth-rate areas.
That researcher found that low-cost areas grow at faster rates than high-cost areas. And that’s true of our area. For example, in the past, we didn’t have an electrophysiologist, or inpatient hospice, but as those services get added, the standard of care changes, and the practice patterns change, and the cost profile changes. And look at the labor costs for Sharp. Some organizations have had labor costs go up seven percent or more; ours went up none. Now, we saved CMS and the taxpayers a lot of money; but we didn’t get shared savings payments. But we did get advanced payments, so I’m fine with that. But in the end, we’ve got to pay staff at market rates.
So CMS needs to adjust some of its standards and calculations?
They do; unfortunately, their hands are tied by the ACA, which states that they must use the national growth rate measures. So in McAllen, Texas, just by having RAC audits come in. They were at $3,000 per home health cost per beneficiary per year; and we were at $250 here. The national average is around $500. Now, one thing that North Carolina has that neither Florida nor Texas have, is certificate-of-need restrictions for home health. We have a very stringent process in NC, so there are fewer providers, but the ones we have here are legitimate. But just because we’re low-cost does not mean we can’t affect change.
And within the Beltway, there’s this unchallenged belief that two-sided risk, where you’re financially on the hook, is the only way you can achieve real gains. But our total budget for the ACO is around $100 million, per 11,000 beneficiaries, at $85 per beneficiary. And let’s say our costs go up because of the wage index of the hospital, which is what happened to Sharp Health Care. The hospital got paid more money because the wage index went up. And that is something outside the control of the doctors; they can’t control that. You combine that with a changing standard of care in a local community, especially one that’s underserved and not receiving the same level of care in other parts of the country. And let’s say costs go up 5 percent, and I have to pay back CMS $5 million. Our doctors aren’t going to be able to try any harder than they are already.
But per two-sided risk, the possibility of the bonus, to me, is sufficient, including a penalty element. And the people at MedPAC and others aren’t realizing that for physician-owned and –operated organizations, that downside risk is too much. So to me, that’s something they really haven’t thought through completely, and someone needs to challenge the inside-the-Beltway thinking that two-sided risk is the only way to go. We’re not going to risk 100 percent of our salaries. And then we’ll drop out of the program and be soured. Yet CMS really wants groups like us, without conflicts of interest, who can provide the best care.
[Editor’s Note: Stephen Nuckolls is an active member of the leadership of the National Association of ACOs (NAACOS), which on Feb. called on CMS officials to make major changes to the Medicare Shared Savings Program. A press release from NAACOS said, in part, the following: “Beyond $705 million in cost savings, one-sided risk ACOs have also demonstrated in the first 20 months of the program significant improvement in the quality of care for Medicare beneficiaries. Our surveys have shown physician groups and hospitals have accomplished this with a substantial investment of their own capital and operating funds totaling almost a $1 billion to date. While CMS states half of the 220 first year ACOs saved money, only 52 actually received shared savings and that amount was only 50 percent of the total savings achieved. 'We hope the comment letters from NAACOS and the other major healthcare organizations in the country will convince CMS to make large-scale improvements to the ACO program,' said Stephen Nuckolls, Chair, NAACOS Policy Committee and CEO, Coastal Carolina Quality Care, Inc.”]