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ACOs and Bundled Payments: Three Things You Should Be Doing Now

The Centers for Medicare & Medicaid Services (CMS) recently made three significant announcements, signaling a strong commitment to continuing value-based care delivery initiatives.

First, we learned that 124 groups of providers recently joined the Medicare Shared Savings Program (MSSP) or its Track 1+ accountable care organization (ACO) model, fostering a large uptick in Medicare ACO participation. CMS also announced the launch of the Bundled Payments for Care Improvement (BPCI) Advanced model as its next generation voluntary bundled payment program to build on the progress made under the BPCI program. Additionally, the agency highlighted 14 new Next Generation ACOs.

What’s more, providers that participate in the BPCI Advanced,  the MSSP Track 1+ model and the Next Generation ACO model will likely qualify as Advanced Alternative Payment Models (Advanced APMs), meaning clinicians are eligible for the five percent Medicare payment bonus in 2021 under the Quality Payment Program, as long as they meet the threshold for patients or revenue going through the model. These shifts are creating additional incentives for doctors and hospitals to participate in value-based payment models that require them to accept two-sided risk.

With $2 billion in savings generated by Medicare ACOs, and CMS realizing savings through their bundled payment programs, value-based models are proving to be successful in achieving both patient-centric and cost-effective care. In fact, we have found that effective APMs can generate increased savings and quality improvement – Premier Population Health Management Collaborative member Medicare ACOs have consistently performed 2X better than all other Medicare ACOs since 2012 and Premier Bundled Payment Collaborative members in the Comprehensive Joint Replacement (CJR) model are performing 35 percent better than their peers.

Staying ahead of this shift toward value-based payment and risk-sharing is becoming increasingly important. ACO and bundled payment models can be a powerful means to increase revenue, manage costs and get better reimbursement, as well as achieve highly reliable care.

Below are three key strategies your organization should consider to enable success within alternative payment models:

  1. Apply to be in Wave 1 for BPCI Advanced and beat the competition! Bundled payments will be part of the future of hospital and provider payments. With applications due on March 12, 2018, time is of the essence as CMS doesn’t plan to allow additional participants until 2020. If you don’t get in now, other providers could commoditize your hospitals. Whether or not you decide to participate in BPCI Advanced, it is highly encouraged to complete the non-binding application. This allows CMS to release the data for all 32 episodes (e.g. 29 inpatient and three outpatient conditions). Using this robust data, leaders can glean insights into care patterns, utilization and the cost of care being delivered to patients. With this data, it’s an opportunity to understand trends in the market and risks. Premier offers assessments to quantify these opportunities without having to wait on the CMS to release the initial data – click here for an overview of the new BPCI-A initiative.
  2. Assess and build your capabilities for success. ACOs and bundled payment models are an opportunity for healthcare providers and payers to work together on improving health for patients and better managing costs. In today’s environment aligned incentives, effective high-value networks, clinical integration and robust data management systems are key. Learn more about building a successful APM.
  3. Consider your APM options to support MACRA/Quality Payment Program (QPP). The MSSP application period is also quickly approaching. If you are still participating in the MIPS portion of QPP, consider the alternatives of a MIPS-APM (MSSP Track 1) or an AAPM (MSSP Track 1+, 2 or 3), through an ACO model for your physician who are not able to participate in BPCIA. Read more on the forgotten MIPS-APM track of MACRA/QPP.

Want to learn more about your options to survive in today and tomorrow’s value-based, risk-sharing environment? Contact Seth Edwards regarding Accountable Care Organizations and the Medicare Shared Savings Program or Mark Hiller on Bundled Payments.

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