Following a summer centered on the politics and legality of the Affordable Care Act, this fall promises to pull accountable care delivery and risk-based contracting into sharper focus.
The Centers for Medicare and Medicaid Services (CMS) approved 147 new Accountable Care Organizations (ACOs) over the last two years, 88 of which went live this past July. The trend is sure to continue: CMS is already considering applications for its third cohort of the Medicare Shared Savings Program (MSSP) and evaluating applications for the Bundled Payment for Care Improvement (BPCI) initiative. However, for health systems that are not yet prepared to incur the risks or administrative workload of a Medicare or large-scale commercial contract, there is a more manageable option: pilots with employee populations.
In such a pilot, the provider—and for fully insured health systems, a third-party payer— establishes risk-based contracts for its own employees on a specified group of DRGs. According to our 2011 Accountable Payment Survey, 55% of health systems are planning to pursue a shared savings program by 2015, and 51% of those planning to pursue bundled payment intend to do so with their own employees.
Risk-based contracting: Leveraging the employee population
This summer promises to be eventful for the health care industry. The Supreme Court is expected to decide the fate of the Affordable Care Act (ACA) toward the end of June, and the presidential race is heating up, with health reform playing a central role.
While the ACA’s critics have focused on the individual mandate, several payment reform initiatives codified in the law are progressing. Assuming the Supreme Court upholds these provisions—an outcome we view as likely, though by no means certain—the next few months will offer clues about the progress of Medicare’s bundled payment and shared savings initiatives.
These initiatives have garnered considerable interest from health systems and other provider organizations around the country. The Medicare Shared Savings Program (MSSP)—which accepted its first 27 Accountable Care Organizations (ACOs) in April—will select another cohort with contracts in effect on July 1. Letters of intent are due on June 29 for the following MSSP start date, in January, 2013.
Medicare's newest bundled payment initiative is progressing as well. On June 28, applications are due for the Medicare Innovation Center’s Bundled Payments for Care Improvement (BPCI) initiative, which is expected to garner a healthy number of applicants.
Five payment reform developments: What to look for