Genesis’s LTC ACO Pulls in $18.8M in Shared Savings for 2019

LTC ACO, the accountable care organization (ACO) launched by Genesis HealthCare (NYSE: GEN), brought in $18.8 million for the nursing home operator under the Medicare Shared Savings Program (MSSP) during the 2019 program year.

The ACO achieved sufficient Medicare fee-for-service savings among its 5,800 beneficiaries to trigger the payment, which translates to $17 million in net income minus distributions to participating providers.

“With more than four years of participation under the MSSP, we have gained valuable experience driving better outcomes and improved quality, managing episodic cost, and developing in-house capabilities to predict program performance,” LTC ACO president Jason Feuerman said in a statement announcing the results.

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LTC ACO saw a savings rate for costs under management of 19.6%, with a 94.5% quality score, according to Feuerman.

ACOs represent a type of alternative payment model in which providers band together to increase care collaboration and, in turn, reduce fee-for-service Medicare spending. For the 2019 program year, the MSSP tasked ACOs with cutting total Medicare outlays by 2.8% in order to receive up to 62.5% of the resulting savings, with the rest reverting to the Centers for Medicare & Medicaid Services (CMS).

Originally launched in-house as the first ACO sponsored by a long-term care facility, the group was rechristened as LTC ACO last year to reflect Genesis’s push to grow the network outside of its own facilities. The ACO now oversees about $160 million in total annualized Medicare spending, with 200 long-term care centers and physicians outside of the Genesis footprint.

While the ACO model has seen criticism in the skilled nursing space for its propensity to achieve savings by reducing SNF utilization — with one operator going so far as to call the payment system ‘a disaster‘ for the sector — Feuerman has positioned his ACO as the one player in the sector that wants to look at the MSSP differently, primarily from the post-acute perspective.

“It’s a way for you to create value for your physicians that could, in turn, create value for the facility by not only improving quality and decreasing costs, but creating a different level of alignment that you have between you and your physicians that you rely on, presumably, for admissions,” he told SNN earlier this year.

Feuerman and Genesis have also pitched the LTC ACO as an easier-to-join alternative to Institutional Special Needs Plans (I-SNPs), special Medicare Advantage plans that cover nursing home residents that have grown in popularity in recent years.

“You have people that have looked at the [I-SNP] model and really liked it,” Feuerman said. “They realize they don’t have the capital to really get involved with something like that, and they don’t have the risk tolerance to take on the downside risk, and are looking for another way to play in a value-based arena without having to put up capital and assume risk.”

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