Rob Lazerow on April 12, 2012 |
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Topics: Medicare, Reimbursement, Finance, Accountable Care, Market Trends, Strategy, ACO, Shared Savings Model
Read our five key reactions to the launch of the Medicare Shared Savings Program, which will initially include 27 new Medicare ACOs serving beneficiaries across 18 states.
On Tuesday, CMS announced the initial 27 organizations selected to become ACOs through the Medicare Shared Savings Program (SSP). The first cohort of program participants, which includes just 10 hospitals, will serve approximately 375,000 fee-for-service Medicare beneficiaries across 18 states. For a full listing of the new Medicare ACOs—and a map displaying their locations—please see our coverage in the Daily Briefing.
Medicare ACOs are beginning to emerge at a rapid pace. Across all current opportunities to form Medicare ACOs—the SSP, Pioneer ACO Model, and Physician Group Practice Demonstration—CMS is now reimbursing 65 organizations through shared savings payment models. CMS has indicated that there are many more ACOs in offing, with the agency reviewing approximately 150 applications to join the second Shared Savings Program cohort, slated to launch in July 2012.
Five reactions to the SSP launch announcement
We have analyzed the SSP extensively though our Medicare Shared Savings Program Rulebook, exploring the key details and strategic implications of the final program. But with the selection of initial program participants, the SSP is now a reality in markets across the country. In addition to our previous analyses of the SSP, here are five initial reactions to the SSP launch announcement:
1. SSP Final Rule contains meaningful improvements
The level of interest in joining SSP in 2012 (both in April and July) confirms that CMS moved in the right direction with the program design outlined in the SSP’s Final Rule, increasing the overall attractiveness to providers. Several key changes in the Final Rule—particularly the improved financial model, simplified quality reporting requirements, and reduced barriers to entry—successfully encouraged a range of providers to apply for the SSP.
2. Payment innovation has no geographic boundaries
The wide geographic spread of organizations participating in the SSP and Pioneer ACO Model demonstrates that payment innovation is not limited to the handful of markets and states that have been historically ahead of the curve. Providers nationwide have a real opportunity to participate in payment transformation.
3. Acceptance in SSP no guarantee of success as ACO
After being accepted to the SSP, these 27 organizations now face the challenge of functioning as successful ACOs. For example, these organizations will need to begin the hard work of building the medical perimeter and expanding chronic disease management capabilities. Much like in past Medicare payment experiments, new ACOs may experience a range of success and failure.
4. New ACOs prefer shallower end of the pool
Across the 27 new ACOs, only two organizations selected the higher-risk, higher-reward payment structure that includes downside risk. Even if organizations are willing to be first in line for the SSP, they are carefully staging their overall level of risk in the program.
5. Physicians open to forming ACOs without hospitals
In the initial SSP cohort, 20 physician-led ACOs are participating without hospital partners. In these markets, it will be critical to monitor how the competitive landscape shifts—and what roles hospitals take as independent physicians emerge as local population health managers.
Evaluating the SSP?
Many organizations continue to assess the SSP in advance of upcoming application deadlines. Although the application period has closed for the July 2012 cohort, organizations can begin applying for the Jan. 1, 2013 start date. To apply for the 2013 launch, organizations must submit a notice of intent (NOI) by June 15, 2012. More information is available on CMS's SSP application website.
We have a suite of resources to help you determine your accountable care strategy and build effective ACOs, including our Accountable Care Readiness Diagnostic, Playbook for Accountable Care publication, expert access, and Southwind consulting division. If you have any questions about the SSP or our ability to help you become an ACO, please call or email me directly.
