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Dr. Mostashari Gives “Report from the Field” Inside Look on Aledade ACOs

September 21, 2016
by Rajiv Leventhal
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Farzad Mostashari, M.D., founder of Aledade, a company focused on physician-led accountable care organizations (ACOs), co-published a report this week looking at the highs and lows of Medicare Shared Savings Program (MSSP) ACOs in light of recent performance results released by the government.

Dr. Mostashari, the former National Coordinator for Health IT, launched the Bethesda, Md.-based Aledade in 2014. Since then, Aledade has formed ACOs in New York, Delaware, Maryland, Arkansas, West Virginia, Tennessee, Mississippi, Florida, Louisiana, Virginia, and Kansas, which collectively care for more than 100,000 Medicare patients.

There were two Aledade-initiated ACOs in the 2015 MSSP class, one of two federal ACO programs as provider organizations continue to be pushed towards participation in outcome-based risk contracts. According to the Aledade report, “Based on Centers for Medicare & Medicaid Services (CMS) public data, the “Aledade Primary Care ACO” (APC) (with practices in Maryland, New York, and Arkansas) was in the 98th percentile of quality scores across all 327 ACOs that began in 2012 to 2014, but essentially broke even, with 0 percent savings and 0 percent cost increase. The ‘Delaware ACO’ quality scores were in the 88th percentile, with a calculated cost increase of 2.5 percent.”

Last month, CMS released performance and financial data for more than 400 ACOs in the MSSP and Pioneer government-led programs, revealing more than $466 million in total program savings in 2015, although nearly seven in 10 of those ACO organizations did not generate enough savings to receive bonuses, thus representing varied levels of success. It should also be noted that CMS paid $646 million in shared savings bonus payments to high performing ACOs, leading to a net loss of $216 million, or a loss of slightly less than 0.3 percent.

As such, in the report, published in the American Journal of Managed Care and co-authored with Aledade’s Travis Broome, the authors noted that “there is no magic bullet for ‘transforming healthcare’ overnight, and that the work of redesigning our delivery systems to meet the expectations of the outcome-based payment models will be slow, hard, and uneven.” They said, “We would accept that there are likely multiple payment reforms that will need to be implemented alongside each other, targeting different healthcare markets and different participants. (Capitated payments for truly integrated delivery networks. Mandatory bundled payments for proceduralists and hospitals. Accountable care for independent physician networks). And each model will need to be iterated and tweaked and incrementally improved.”

Mostashari and Broome pointed to Aledade’s two ACOs that were part of the 2015 cohort, in which they successfully increased primary care utilization (and revenue). “We saw significant quality improvements. We achieved rates of aspirin use for patients with ischemic vascular disease of 87 percent, screening and follow up for elevated blood pressure at 90 percent, and tobacco use screening and cessation at 93 percent,” they wrote.

However, they noted what they called “regulatory headwinds that ACOs in the MSSP program face.” They said, “For instance, the calculated ‘benchmark’ used to determine savings is a flawed measure of the counterfactual. By using national trends rather than regional comparators, MSSP program success is an inaccurate reflection of what costs would have been for ACO patients in the absence of the ACO (‘difference in difference’). Regional trends (eg. in hospital coding, whereby utilization decreased but cost increased) will not be reflected in some ACO results, while others will benefit simply from downward regional trends. In addition, we (and I suspect many other ACOs) saw millions of dollars of savings evaporate due to downward risk adjustment, as a peculiar feature of the MSSP, wherein risk adjustment can decrease the benchmark, but never increase it. Aledade has the resources to understand and accommodate to these factors, but many ACOs do not. These are the sorts of regulatory tweaks that can make a true difference in health care delivery innovators staying with the program over the long run.”

The authors further noted that although physician-led ACOs do not have to contend with the “demand destruction” that impact hospital-led ACOs, they need to pay particular attention to specialist costs. “In particular, specialist practices that have been reclassified as hospital outpatient settings can double the cost to Medicare for visits and procedures. As we move forward, we are bringing more focus—and scale—to influencing downstream care through specialist tiering, referral management, and compacts.”

The full report went on to describe various strategies deployed by Aledade ACOs around: patient attribution, by working with practices to increase their availability and access to patients and to actively reach out to patients who had not been seen recently for annual wellness visits; quality improvement, by having its practices be users of certified electronic health record (EHR) technology, which were optimized with visit templates and order sets to increase consistency in provision of preventive services, screenings, and immunizations, particularly in the context of annual wellness visits; avoiding unnecessary ED visits, by working with practices to broaden access to same-day scheduling for urgent visits, improve after-hours telephone triage, and educating patients about appropriate use of the ED; and finally, improving care transitions by establishing real-time notifications of hospital discharges through integration with health information exchanges, direct hospital Health Level Seven International (HL7) feeds, and optical character recognition and natural language processing of fax notifications.

In conclusion, the authors reported, “We have learned that, given the right support and incentives, independent primary care practices can embrace population health and practice redesign. These efforts can begin to bear fruit in improved patient access, quality of care, and appropriate utilization in the short term. We strongly believe that the benefits of the program to patients and the taxpayer are not limited to those ACOs that received shared savings distributions. However, lack of recognition of these contributions may stifle continued innovation and physician engagement with alternative payment models.”

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