John Malone
John Malone

Many eligible healthcare organizations are still determining if they plan to enter the Centers for Medicare and Medicaid Services’ (CMS’s) Pathways to Success Medicare Shared Savings Program (MSSP) for Jan. 1, 2020. As previously noted, the Notice of Intent to Apply (NOIA) can be submitted between June 1 and June 28, 2019, with the final application due between July 1 and July 29, 2019.

In part 1 of this article, we discussed key questions that need to be addressed if you are thinking about joining the program, and we listed 7 specific strategies ACO leaders can take to significantly improve their probability of success in the new program. In part 2, we take a closer look at forecasting your potential outcomes, and we discuss tactics to support the 7 winning strategies.

Forecasting the Impact of Quality on Shared Savings Potential

Douglas Ardoin, MD, MBA
Douglas Ardoin, MD, MBA

To forecast shared savings potential and downside risk, the first step is to gather historical data for quantitative measures such as cost per beneficiary per year, admissions per 1,000, readmissions, emergency department (ED) visit percentages, the 13 accountable care organization (ACO) quality measures, and Consumer Assessment of Healthcare Providers and Systems (CAHPS).

Because past performance is the best predictor of future results, it is possible to accurately project future performance trends using the MSSP program guidelines for maximum shared savings. For example, using historical and current data from your electronic health record (EHR), it is possible to forecast future performance of the 13 ACO quality measures (see chart below) across high-volume group practices within the future ACO. Once you have this level of quality detail and projected performance, you can assume the range in which your overall total quality score will land and calculate the impact of quality on shared savings.

Finally, regarding shared savings, it is important to develop an estimated per beneficiary per year benchmark for annual spend. Unfortunately, CMS does not make this information available for your attributed lives until after your full application is submitted. However, it is possible to use available historical metrics and published state averages.

Many current and potential future ACOs have begun to forecast both upside opportunity and downside exposure based upon the limits published by CMS for the Basic tracks. By either knowing or estimating the size of your beneficiary population and corresponding minimum shared savings and loss percentages, forecasts of future performance can be estimated.

Forecasters will need to factor in their likely quality score (90 percent is a good standard), as well as the 2 percent sequestration withhold on final savings calculations. Once the potential shared loss exposure is known, ACOs can build their strategy for reserving funds and/or obtaining loans, lines of credit, or reinsurance to satisfy CMS requirements for backstopping potential losses. It is important that all participants understand the downside risk potential and what their ACO’s financial responsibility is, and the methodology employed to distribute such risk.

Future Tactics to Ensure Success

The following can help you achieve your goals:

CMS Quality Audit Process: CMS conducts an annual quality audit of new and existing ACOs. For new entrants into the program, preparation for this prescriptive process is a key for success. CMS will provide a subset of beneficiaries, measures, and time frame (typically between late January and late March) to complete the audit. Some measures are aggregated by CMS through claims or via a CMS-approved CAHPS vendor, but it is important to understand that completing the part of the audit that requires your direct participation will require a medical record audit. It is imperative that ACO participants cooperate fully and allow access to their medical records for the identified beneficiaries CMS provides.

In performance year 2017, the average ACO quality score was 90.5 percent, according to the National Association of Accountable Care Organizations (NAACOS). In general, existing ACOs have used past performance results to indicate where they have the most opportunity for improvement. For new ACOs, the quality score for the first year in the program will be based upon reporting of quality and not performance. Some ACOs have started aggregating EHR data for the organization’s primary care providers (PCPs) and conducting a comparison to ACO quality measures. This can give some insight as to where ACOs should focus in advance of upcoming pay-for-performance years.

Getting Population Risk-Adjustment Right: Knowing how CMS calculates your ACO’s financial benchmark for your beneficiary population is critical to success in the program. Creating an Annual Wellness Visit (AWV) program that encourages providers to reach out to rising- and high-risk beneficiaries is a winning strategy. In these visits, accurate ICD-10 coding and review of all medical conditions can lead to better HCC capture, which will inform CMS of the true risk adjustment for your population. This will ensure that the correct financial targets are set, giving the best opportunity for success. There are several analytics vendors that can identify which beneficiaries should be seen for re-documentation and for those who may have been missed based on test results or pharmaceuticals prescribed. Some of the EMR systems have also embedded similar capabilities for population management.

Let the Data Lead: Part 1 of this article mentioned several strategies for population management. All of these are important, but it is critical to develop an analytics mindset, letting the data point you in the right direction to achieve the most significant outcomes. ACOs will receive annual Claim and Claim Line Feed (CCLF) files that are information rich and lend themselves well to analysis. Knowing how your ACO compares on acute admission and ED utilization/costs is very important. Because avoidable hospital stays and ED visits can create a burden on an ACO’s financial performance, this insight can inform if immediate action is required. Care coordination resources are key to managing rising- and high-risk beneficiaries and those with chronic diseases who most utilize these services. Another key focus area is post-acute care. Creating a program around skilled nursing facility (SNF) providers that measures quality and readmissions can enable you to have critical conversations with those providers. Home health recertifications is another area that is often ripe for improvement. Any effort to reduce clinical variation that focuses on outcomes and costs (e.g., inpatient surgical procedures and subsequent post-acute care) will also improve financial performance.

These are just a few more granular tactics and recommendations in support of the 7 strategies outlined in part 1. Focus, measurement, and action will be keys to achieving success in Pathways to Success.

John Malone is a principal and Douglas Ardoin, MD, MBA, is a managing principal for Lumina Health Partners.

Related Resources: 

Subscribe to Our Insights