A health care advocacy group has criticized recent changes in quality standards for Accountable Care Organizations.
Accountable Care Organizations (ACO) are provider networks created under the federal Affordable Care Act. They are designed to coordinate patient care and make health care delivery more efficient. ACOs are allowed to participate in shared-savings programs that offer the opportunity to split money with insurers or government programs if ACO providers meet quality standards for patient care while spending less than an agreed-upon amount to care for a set population.
Standards for Vermont’s Medicaid and commercial shared-savings programs offered to ACOs were approved by regulators in November 2013. But the Green Mountain Care Board recently approved a set of changes to those standards despite opposition from the Office of the Health Care Advocate, a Legal Aid Project that represents consumers before the board.
The Health Care Advocate took issue with a provision allowing an ACO to receive shared savings even if it fails to meet minimum quality standards, as long as the board determines that the ACO has made “meaningful improvement” over the previous year.
“We feel strongly that the quality requirements for the ACOs are already too low,” Julia Shaw, a policy analyst for the health care advocate, said in an email.
Even under the old standards ACOs could earn shared savings if they performed poorly on a majority of the quality measures, she said.
“This new language sets the bar even lower and sends the wrong message to the ACOs about the importance of high quality care,” Shaw said.
The shared-savings programs are retroactive to the start of 2014; the performance period extends through January, at which time stakeholders will begin to assess whether the ACOs met quality and cost measures. That will take four to six months, because of the lag in processing health care claims.
That means it won’t be known if Vermont’s shared-savings programs reduced costs or improved care in their first year until mid-2015.
This year, the Medicaid shared-savings program will cover roughly 50,000 people — 33 percent of the program’s total beneficiaries. The commercial shared-savings program covers 34,500 Blue Cross Blue Shield customers enrolled through the Vermont Health Connect marketplace.
The federal government offered a Medicare shared-savings program, which began in 2013, and this year included all three of Vermont’s ACOs. The program covers 65,700 Medicare beneficiaries, or more than half of Vermont’s total Medicare population.
The federal government had earlier launched a program known as the Medicare Pioneer ACO Model, which started a year earlier in 2012, and included 32 provider networks nationwide.
The difference between the shared-savings programs and the pioneer group model is that the pioneers took what is known as “downside risk” from the start. Downside risk for ACOs means they agree to pay a portion of the cost if spending targets are exceeded.
Vermont’s ACOs have signed contracts, typically three years in length, that include no downside risk. After those contracts are up, participating hospitals and doctors will have to decide whether to sign new contracts that could expose them to downside risk.
Since its 2012 launch, 10 of the 32 ACOs selected to participate in the pioneer group have dropped out, mostly due to financial concerns. The most recent provider network to eject was Sharp HealthCare, a five-hospital system in San Diego, California, according to a report from trade publication Modern Healthcare.
Sharp HealthCare quit the program because, according to its executives, there was a “significant risk” it would owe Medicare money if it stayed in the pioneer group, despite reporting that it had reduced its volume of services and improved care.
It remains to be seen whether providers within ACOs will continue to participate once they could start losing money.
This first year is being treated as an opportunity for all parties to acclimate to the changes, fine tune the program and see what needs to be tweaked, stakeholders have said.
It’s possible that Vermont will abandon shared-savings programs altogether, in favor of other payment models such as global budgets — a capped payment to care for its population that is adjusted for demographic and health trends.
