CMS Makes Significant Updates to ACOs But Still Leaves Nursing Homes Largely Out of Conversation

While the Centers for Medicare & Medicaid Services (CMS) proposes to make some of the most significant changes to its accountable care organization (ACO) model since it was finalized in 2011, it doesn’t appear that such updates will have a lasting impact on the broader skilled nursing industry.

If anything, only operators with their own physician group may be able to form their own ACO more easily, according to ATI Advisory Managing Director Fred Bentley. The ability to qualify for advanced savings and a slower transition to taking downside risk, in addition to the usual upside risk associated with ACOs, could lure more SNF participation, he said.

“It starts to tip the scale a little further in terms of or making it that much more enticing to join,” added Bentley. “I think there are a subset of long-term care organizations that are interested in doing more than just partnering, which really to date has not been a winning proposition.”

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Advance payments for social services, changes to performance quality scores and benchmark adjustments were among major proposed changes to ACOs; updates were included in the Physician Fee Schedule (PFS), published by CMS in early July.

Bentley expects the proposed changes to have less of an impact on partnering with ACOs, while those in the industry will have to acknowledge that the model is “here to stay.”

“From the skilled nursing operators’ perspective, this just underscores that ACOs are permanent fixtures,” added Bentley. “I think most skilled nursing operators knew that, but this reinforces that.”

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Jill Sumner, vice president of population health management for the American Health Care Association (AHCA), said she hopes these proposed changes will prompt ACOs to really engage with the industry.

“To date, there are very few, three only, ACOs that we know of that are really engaged meaningfully with providers around their long-term care population,” Sumner said.

Most ACOs, she said, partner with SNFs to collect metrics and employ management techniques to reduce length of stay and access to care, rather than create any sort of advanced primary care model within the facility.

Sumner would like to see CMS contract directly with operators rather than physician groups as part of the ACO model as well – unfortunately not an update included in the PFS.

In expanding the ACO program, CMS will be looking “high and low” for places to constrain utilization and spending – and nursing homes are usually first on the chopping block, Bentley told Skilled Nursing News.

Proposed changes also indicate more broadly that CMS, at least in terms of the MSSP program, are fully supportive and want to increase participation in such programs despite perceived hesitation to bolster value-based care.

“This current administration has been somewhat reluctant to produce new value based payment models, and at times seemed almost a little ambivalent about value-based care,” added Bentley.

The future of SNFs in ACOs

Since it’s clear that CMS wants more beneficiaries to be covered under an ACO, nursing homes need to negotiate for better rates and extended care delivery in their setting, according to Mark Besch, senior specialist for government affairs and analytics at Aegis Therapies.

ACOs actively manage the care that is authorized to be carried out in a SNF, he said, so understanding what those guidelines are and advocating for the industry will be huge moving forward.

“CMS has a desire to have a large percentage of the traditional [Medicare fee-for-service (FFS)] beneficiaries involved in ACOs. The more ACOs that CMS facilitates, the larger that percentage becomes,” Besch said.

Currently, there isn’t a large percentage of Medicare Part A SNF admissions that are covered by an ACO, he said. That might need to change, given CMS’s call for more ACO involvement.

“I think we need to encourage CMS to continue to report on the qualitative outcomes from the ACOs,” Besch said. “They’re quick to report on the dollar savings – which we get, it’s part of the shared savings program, but … the qualitative results from ACOs should be front and center, or at least equivalent to any cost savings motivation.”

The advance payments, combined with proposals to take stock of ACO performance, membership and quality measures, are also centered around CMS’ efforts toward shared savings, Besch added.

“I know they’re disappointed that enrollment has plateaued, which is a concern,” said Besch.

CMS knows its current ACO beneficiaries are not representative of the wider population, he noted.

Bentley said that while the SNF industry has really moved in a meaningful way toward Medicare Advantage and I-SNPs, ACOs could be a viable opportunity down the road.

“That’s another big takeaway for SNFs as they’re thinking about where are we headed in the future, what are the opportunities and to what extent do we need to diversify and capture, generate new revenue streams,” said Bentley. “This could be a way to get into that risk contracting space, short of partnering to start up a new I-SNP.”

A first for ACOs

The agency is aiming to facilitate more ACO development with the changes, according to commentary in the proposed PFS, especially with those that are in their early stages.

Efforts would “help achieve the goal of having all people with traditional Medicare in an accountable care relationship with a health care provider by 2030,” said Dr. Douglas Jacobs, chief transformation officer in the Center for Medicare.

Jacobs spoke on ACO updates during a national stakeholder call on Tuesday.

In terms of advance payments, Jacobs said this would mark the first time traditional Medicare payments would be used to address social determinants of health – along with providing an opportunity for rural and other underserved areas to invest and succeed in the program.

In another first, CMS is proposing a health equity adjustment to the ACO quality performance score, placing more weight on delivering care to underserved populations, according to Jacobs.

Melody Danko-Holsomback, vice president of education for the National Association of ACOs (NAACOS), said she is excited to see CMS’ adjustment of quality scores to incorporate underserved populations.

She previously served as operations director, then chief administrative officer for Keystone ACO, contracting with up to 50 skilled nursing facilities with a 200-mile breadth of rural markets.

“Those star ratings, we found, could be harder to reach in some regions than others. It may have brought [a facility that] was really a three or four star as far as patients or family members felt, to a two star and then they couldn’t participate,” Danko-Holsomback said of SNF partnerships with ACOs.

Benchmarking adjustments aim to take into account the administrative growth factor, what Bentley calls an underlying cost benchmark.

“I read that to mean that they’re going to bump up the benchmarks, which is good, right? You want higher benchmarks because that means you don’t have to reduce costs quite as much,” Bentley said. “That’s an acknowledgement potentially of inflation or just administrative costs that CMS perceived and were not fully accounting for.”

Benchmarking methodologies also aim to attract more participation in higher complexity and clinical risk categories, pulling dual eligible beneficiaries into an ACO plan, added Martha Schram, president and CEO of Aegis Therapies.

Such beneficiaries are seen a lot of the time within the nursing home setting, meaning a lot of SNF residents could be part of an ACO plan in future, as part of CMS’ expansion efforts.

Besch said a benchmark focused on higher complexity can be considered part of CMS efforts to curb underrepresentation among the wider population.

“[CMS is] focusing on the new ACOs, those incentive payments are pretty hefty in investment for new ACOs early on, and then an annual or quarterly boost for a number of years. They definitely want to support ACO expansion,” added Besch.

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