Skilled nursing operators will have until April 22 to decide whether they want to apply to become a part of the Centers for Medicare & Medicaid Services’ new direct contracting model.
The Realizing Equity, Access, and Community Health (REACH) Accountable Care Organization (ACO) Model was announced by CMS last week. And while SNF participation in ACOs has been limited in the past, the new model may present a better path to value-based care for some operators.
The application period for CMS’s Global and Professional Direct Contracting (GPDC) Models replacement opened Monday, and providers will have a limited amount of time to decide whether or not to participate.
During a recent webinar regarding the new model, CMS officials said the agency may choose to limit the total number of accepted applications and that it is not anticipating another application round at this time.
While some continue to see I-SNPs (institutional special needs plans) as a better fit for SNFs in the value-based care space, others are more bullish on ACO REACH and its appeal to SNF providers.
“I’m not very optimistic that the REACH ACO will make [upstream players] more interested in collaborating with SNFs and sharing in the savings,” Fred Bentley, managing director at ATI Advisory, told SNN. “It’s not unheard of, but I just think under that model, SNFs are relegated to a downstream player who are at the whim of REACH ACOs, who by the way, are looking for any way to reduce cost.”
Brighter future ahead for ACOs and SNFs
ACOs are typically groups of doctors, hospitals, and other healthcare providers that work together to provide coordinated care to their Medicare patients, according to the Centers for Medicare & Medicaid Savings. ACOs have historically been a contentious payment model in the skilled nursing sector since they were introduced as part of the Affordable Care Act of 2010.
Multiple studies found that ACOs generate savings by reducing the length of stay in a nursing home, while other ACO programs eliminated SNFs as participants altogether.
Bentely said some of the larger operators have shown more willingness to enter into some of these models.
“That said, that is a subset of the industry and you’re going to have to be of a certain size, scale and sophistication and have a certain risk tolerance to do that,” he said. “The vast majority of SNFs aren’t there.”
The model aims to keep the momentum of provider-led organizations participating in risk-based models going and hopes to protect beneficiaries better with more participant vetting, monitoring and greater transparency.
One way it will look to improve transparency is by having doctors and health care providers play a bigger role in accountable care in the new model. For instance, at least 75% control of each ACO’s governing body must be held by participating providers or their designated representatives, compared to 25% in the GPDC.
Bentley expected to see more SNFs contracting with a REACH ACO rather than starting their own.
He also said SNFs that want to get involved in the model have to move on it quickly.
“I don’t foresee CMMI producing more models and certainly not models where SNFs are in the driver’s seat,” he said.
Still, Bentley said the shift to value-based care may happen sooner for nursing homes than expected.
“It’s funny because if you’d asked me about this a week ago I might have had a different answer, but in light of the the slate of new reforms and proposals that have come out from the Biden administration, that clearly is where they’re focused, as it pertains to SNFs,” he said.
As Tim Peck, founder of Curve Health – a platform that includes telemedicine, health information exchange, data and predictive analytics – put it, every year is bigger than the last in the nursing homes industry’s shift to value-based care.
He called REACH ACOs the “next big thing” to build upon that.
ACO REACH ‘high needs’ could be a new path
The ACO REACH model will include provider-based organizations focusing on three types of participants. One of which – high needs population ACOs – is expected to be the one that attracts SNFS.
These ACOs serve Medicare patients that have complex needs, including dually eligible beneficiaries, though a claims-based alignment. These participants are expected to use a model of care designed to serve individuals with complex needs, similar to the one employed by the Programs of All-Inclusive Care for the Elderly (PACE), to coordinate care for their aligned beneficiaries, according to CMS.
Of the 99 direct contracting entities (DCEs) participating this year, there were 78 standard DCEs, 13 new entrant DCEs, and eight high needs populations DCEs.
High-needs population ACOs could be a ‘real opportunity’ for a subset of groups or chains in the sector, Bentley added.
“They are going to change the way the benchmarks and economics work so ACOs that have a higher proportion of underserved patients actually get a bump or the economics are more favorable to them,” he explained. “There’s also a lot on the equity front that ACOs are going to have to report on, such things as demographics and other disparities.”
Bentley said there’s been research to suggest that ACOs have tended to enroll and focus on higher income and healthier patients, so these changes are likely designed to create incentives not to do that.
Operators contemplating making a run at this need to ask themselves if they have physician partners to work with and if they have a sufficient number of patients to meet the attribution threshold, he said.
He also added that many that are interested have said that they are going to apply and see if they can make it in before making a decision on whether to participate or not. It’s not binding, they can get accepted and say, ‘No thanks,’ he added.
“It’s a lot of risk and a lot of new capabilities to take on in a really short amount of time,” he added.
Peck was a little more ‘bullish’ on SNFs participation in the ACO REACH Model.
“If you look at the high needs portion, that’s where it’s going to be applied to SNFs,” he said.
Peck said that because the direct contacting model was introduced by the Trump administration, and redesigned by Biden administration, it shows bipartisan involvement and is a reason for optimism.
The high needs REACH ACOs could provide a value-based option for SNFs that is more palatable and gives providers a better seat at the table, he added.
“The Medicare dollars that you’re saving, that you’re taking risk on and are paid for, are the dollars that usually go to hospitals for hospitalizations,” he explained. “You’re not taking money away from SNFs, you’re adding money to the SNFs for doing the right thing.”
Overall, there’s an expectation that more nursing homes will shift to value-based care in 2022.
“Those who are already invested in value-based care can leverage that and are able to protect their bottom lines, protect their operations, and able to have a healthier future,” he said.
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