Earlier this month, HHS announced the launch of the third wave of Medicare Shared Savings Program (MSSP) ACOs. The January cohort includes 106 ACOs—the largest launch group yet—bringing the total number of MSSP participants up to 221 ACOs. According to HSS, up to four million Medicare fee-for-service beneficiaries may receive care from ACOs this year.
To help Toward Accountable Payment readers keep up, we have a few insights on the growth of these ACOs, including our updated national Medicare ACO map.
Where the Medicare ACOs are, Jan. 2013
Four key takeaways about Medicare ACO growth
Physician interest in the ACO model remains high
According to HHS, roughly half of the current Medicare ACOs are composed exclusively of physicians. The incentives behind participation are clear cut for many physicians—earn a bonus by reducing costly, avoidable downstream utilization and meeting quality standards.
One potential limiting factor for physician ACOs—access to capital—has been mitigated by new partnerships with corporate entities (more on this trend below) and programs like CMMI's Advance Payment Model. Fifteen of the new Medicare ACOs are also participating in the Advance Payment Model, which provides upfront and ongoing financial support to certain physician-only and critical access ACOs.
Hospital participation in MSSP is on the rise
Despite strong independent physician presence in each MSSP launch group, hospital participation is clearly growing. Overall, about half of all Medicare ACOs now include hospital participation. This was not always the case; just six of the initial 27 MSSP sites announced in April 2012 included hospital partners.
Hospitals’ delayed participation in MSSP is not entirely unexpected. Compared to the independent physician practices that dominated the initial start groups, hospitals must navigate more complex ACO economics and often contend with slower, more bureaucratic decision-making processes.
ACO growth is occurring both across and within markets
With each new MSSP launch group, more markets are experiencing ACO development. Although payment innovation primarily occurred in select markets in the past—San Diego, Minneapolis, and Boston, to name a few—we are witnessing ACOs emerge coast-to-coast. Health care executives who initially thought “this won’t happen in my market” may be questioning those early assumptions.
We also now find markets with multiple ACOs up and running, marking the rise of ACO-to-ACO competition. We will monitor these markets closely to see if factors like successful care management and effective patient engagement become the new basis of provider competition.
Corporate entities are actively supporting ACO growth
Although Medicare ACOs are provider-based organizations by definition, many of the active ACOs collaborate with third-party investors or partners. For example, Collaborative Health Systems (CHS)—a subsidiary of Universal American, a health insurer specializing in Medicare Advantage plans—partners with 31 of the 221 MSSP sites. CHS now collaborates with over 2,000 physicians, collectively treating approximately 300,000 Medicare fee-for-service beneficiaries.
CHS is not the only corporate entity helping organize Medicare ACOs. In the latest MSSP cohort, Walgreens is collaborating with three of the new ACOs.
Explore the experience of early Medicare ACOs by accessing our on-demand webconference, "8 Lessons from the 2012 Medicare Shared Savings Participants." Also, learn more about our range of services to support emerging and active ACOs.
As always, please feel free to email me with any questions and comments.