Mastering Risk-Based Contracting in MD Groups: Focus on Culture First, then IT, Says Industry Expert | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Mastering Risk-Based Contracting in MD Groups: Focus on Culture First, then IT, Says Industry Expert

May 10, 2016
by Mark Hagland
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Jeffrey Spight shares his perspectives on the cultural and strategic aspects of risk-based contracting in MD groups

One of the major gaps that is becoming apparent these days is the set of problems that patient care organization leaders are finding as they attempt to shift from volume-based care delivery under fee-for-service payment systems to risk-based reimbursement. That is true whether organizations become part of one of the Medicare program’s accountable care organization (ACO) programs—whether the Medicare Shared Savings Program (MSSP), Pioneer ACO Program, or Next-Generation ACO Program—or through any of a wide range of private health insurer-based ACO programs; or via bundled-payment program participation, or any other type of risk contract. All involve considerable population health management-based activity, including the leveraging of data analytics for population health risk stratification, care management, readmissions reduction, and so on.

The set of IT issues around risk-based contracting was named one of the Top Ten Tech Trends by the editors of Healthcare Informatics this spring, and was featured in the March/April cover story package of Top Tech Trends in HCI.

In preparation for the Trend on IT issues and risk-based contracting, HCI Editor-in-Chief Mark Hagland interviewed a number of industry experts, among them Jeffery Spight, president of the White Plains, N.Y.-based Collaborative Health Systems consulting group, a consulting firm that has been working with physician groups involved in risk-based contracting, for a decade and a half. The firm runs 22 ACOs, among them, one Next-Generation ACO, while the other 21 ACOs it manages are MSSP participants (with six of those operating on the two-sided track 2 model of risk assumption). Below are excerpts from the interview that Hagland conducted with Spight this spring, in preparation for the Tech Trend on risk and IT.

Looking at ACO development from 40,000 feet up, what’s your sense of the landscape right now in that area, nationwide?

I can tell you that the departure from fee-for-service has reached the point where I don’t think there’s a way back [to historical fee-for-service operations] now. When you look at all the accountable care programs and related programs being sponsored by CMS [the federal Centers for Medicare & Medicaid Services], there are 8-9 million patients being cared for [under federal ACO contracts.] And as much as bundled-payment contracts have their role, this is the big bet. We have about $60 billion in all the Medicare ACO programs all together, so this really is the big bet. And what CMS has done is to put out lots of options to find a business model that works. And it’s hard to administer one business model, let alone a dozen. But in the Next Generation ACO program [whose details were announced in January], you see about a dozen possible permutations; there are three tracks within MSSP [the Medicare Shared Savings Program], but with many options within those tracks. I see them at CMS creating a lot of different options to help us make it work.

How should we interpret some of the stumbles that have occurred in the Pioneer ACO program since its inception?

Inevitably, in working with big agencies like CMS, there are growing pains, and not everything works. But the area in which we’ve seen some real differences” in the newer models of ACOs, particularly the Next Generation ACO program, “is in their willingness to accept comments, suggestions, and come out with new options. Now, we’re always going to see a lot of areas where we’re going to have challenges. But if you layer in the changes under the MACRA [Medicare Access and CHIP Reauthorization Act of 2015] bill, you now have concrete places that providers have to get to over time.

Remember, Pioneer was a first step. They [Medicare program officials] went out and tried to find organizations big and capable enough to do these sorts of things. Now, what they found is a lot of organizations willing to try to do this stuff. But the structure left a lot of challenges. Pioneer is really being replaced by Next Gen. The MSSP was legislatively driven through the Affordable Care Act; Pioneer wasn’t; it was driven by the CMS Innovation Center, as a test. Same thing with Next Gen. And we wouldn’t have track 3 without the Pioneers. Because it tested a certain methodology, and tested three-day SNF waivers. And the things that worked well, they brought into MSSP. And a lot of the Pioneers said, we need to bring this up to the next level. So some Pioneers are coming into Next Gen. And we were very involved in making sure that some of those elements were brought into the third track of MSSP.

So I see Pioneer as breaking ground. And some organizations, no matter how well they do, they won’t be successful. And that’s the case in every model they set up. We set up 34 ACOs. And we knew that without dramatic changes in program structure, a few of the ones we worked with, they couldn’t succeed. And that’s the case across the country. They knew that not everybody would be successful from the start.

The new rule that came out, directionally, is fantastic. I will always find minor details that I would modify and tweak, but they absolutely knew that the business model would have to change for the longevity of the program.

And what do you see as some of the biggest lessons learned so far, for physicians taking on risk, in both the Pioneer and MSSP programs?


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