The Ephemeral Accountable Care Organization—An Unintended Consequence of the Medicare Shared Savings Program H. Benjamin Harvey, MD, JDa,b, Vrushab Gowdaa,c, G. Scott Gazelle, MD, MPH, PhDa,b,c, Pari V. Pandharipande, MD, MPHa,b,c
A fundamental element of health care payment reform under the Affordable Care Act is the development of Accountable Care Organizations (ACOs). The ACO model employs shared-risk contracts to better align the interests of health care providers and payers with the intent of driving efficiency and quality in care. The Medicare Shared Savings Program is the most popular of the Medicare ACO programs, with over 200 health systems across the nation participating at this time. However, a pitfall in the way that the Medicare Shared Savings Program is structured, specifically the benchmarking and rebasing method, could make it difficult for even top-performing ACOs to achieve sustained success, thereby threatening the long-term viability of the program. In this paper, we present this pitfall to the radiology community as well as potential solutions that can be considered by CMS moving forward. Key Words: Accountable Care Organization, Medicare, shared-risk, rebasing, benchmarking J Am Coll Radiol 2014;11:121-124. Copyright © 2014 American College of Radiology
INTRODUCTION
The Medicare Shared Savings Program (MSSP) is a cornerstone of the Affordable Care Act and pushes forward the Accountable Care Organization (ACO) model [1]. By realigning economic incentives among providers, ACOs are intended to enhance quality while simultaneously lowering the overall costs of health care. Under the MSSP, an ACO will receive a percentage of their health care savings, ie, a direct bonus from the federal government, if performance and cost criteria are met. These bonuses are intended to encourage medical professionals and health care systems to adopt the ACO model. Over 200 health systems in the United States are participating in the 3-year renewable MSSP contract, and many others are considering whether or not to join. Breslau, Abramson, and the ACR have written informative papers about the ACO model and its potential impact on radiology, emphasizing the a
Department of Radiology, Massachusetts General Hospital, Boston, Massachusetts.
b
Harvard Medical School, Boston, Massachusetts.
c
Massachusetts General Hospital Institute for Technology Assessment, Boston, Massachusetts. Corresponding author and reprints: Pari Pandharipande, MD, MPH, Department of Radiology, Massachusetts General Hospital, 101 Merrimac Street, Boston, MA 02114; e-mail: [email protected]. Dr Gazelle reports that he consults for GE Healthcare. Dr Pandharipande reports that she is the recipient of an NIH/NCI Career Development Award and that she receives research funding, unrelated to this work, from the Medical Imaging and Technology Alliance.
ª 2014 American College of Radiology 1546-1440/14/$36.00 http://dx.doi.org/10.1016/j.jacr.2013.07.012
importance of radiologist participation in institutional dialogue about adopting and succeeding in risksharing contracts, such as the MSSP [2-4]. In this piece, we highlight a potential pitfall of the proposed method of calculating shared savings under the MSSP, specifically the benchmarking and rebasing method, which could hinder even top-performing ACOs’ ability to achieve sustained success and threaten the long-term viability of the ACO model. THE BENCHMARKING AND REBASING PROBLEM
Under MSSP, savings are calculated by comparing actual expenditures to a benchmark value determined by CMS for each ACO [5]. This benchmark is based upon fiscal precedent, derived from a weighted average of health care costs of the specific patients assigned to that ACO in the 3 years preceding the agreement period, with annual adjustments for beneficiary characteristics and anticipated growth in Medicare fee-for-service expenditures. For an ACO to qualify for the bonus, the ACO’s average per capita Medicare expenditures must fall below this benchmark by a given percentage, known as the statutory Minimum Savings Rate, which varies from 2.0% to 3.9%, depending on an organization’s size. If the average expenditures exceed the benchmark, the ACO must pay a portion of the excess costs back to Medicare—essentially representing a financial penalty. Although ACOs can elect to avoid this downside risk during their initial MSSP agreement period, all ACOs wishing to continue to participate in the MSSP beyond 121
122 Journal of the American College of Radiology/Vol. 11 No. 2 February 2014
Fig. 1. Illustration of the rebasing problem using actual data from the Kentucky Partnership Program—a prepaid Medicaid managed care program. (A) Savings data from the Kentucky Partnership Program—a prepaid Medicaid managed care program—are used to illustrate a potential pitfall in the financial incentive structure of the Accountable Care Organization model [5]. Savings data are presented as a percentage of the estimated fee-for-service (FFS) expenditures for patients participating in the traditional FFS system. In this hypothetical example, the first 3-year MSSP contract term is defined as 1999-2001 and the second MSSP contract term as 2002-2004. (B) Savings data from the first term are used to calculate the second term benchmark level using the rebasing methodology described in MSSP. Data from 2002 and 2003 are then used to calculate the percent savings below FFS that would be required in 2004 to meet the benchmark level or the Minimum Savings Rate (MSR) level (defined here as 2% below the benchmark level) for the second contractual term. As the graph demonstrates, qualifying for the federal bonus in the second term is unlikely considering the program’s historic savings. (*Represents calendar year, rather than fiscal year.)
the initial term will be forced to participate in a 2-sided contract model that incorporates both risk and reward. The benchmark is rebased, or recalculated, at the start of each new 3-year contract term, using the method described above. Accordingly, when an ACO signs up for a second 3-year contract term, the new benchmark for that term will be calculated based on the patient health care costs from the preceding 3 years. Because the preceding 3 years represent the prior MSSP contract, the ACO’s savings during the first contract term could tighten the new benchmark. Thus, succeeding in the second term essentially means not only sustaining the health care savings of the prior 3 years, but also achieving an additional 2% to 3.9% on top of that. The current rebasing method is clearly intended to encourage ACOs to achieve continual cost improvements across multiple contract terms. However, by placing an ACO in a race against itself, the MSSP rebasing method makes shared savings increasingly difficult to generate. The extent to which any health care institution can safely and effectively generate incremental health care savings term after term is finite. Because the benchmark of the first contract period is based on a system’s historic costs, health care systems that have been committed to optimizing the efficiency of care and reducing unnecessary costs for years, such as the Mayo Clinic, will have fewer savings opportunities left in the system. Thus, such institutions could potentially face difficulty in achieving sufficient incremental savings even in the first contract period. Notably, the Mayo Clinic, touted as a model around which the ACO
system was developed, has decided not to participate in MSSP. In Figure 1, we illustrate the rebasing problem using a hypothetical ACO whose annual reported cost savings are identical to those of a prepaid Medicaid managed care program in Kentucky from 1999 to 2003 [6]. Our example demonstrates that the managed care program would have difficulty qualifying for a federal bonus in a second contract term because, in part, of its success in the first contract term. Moreover, since ACOs participating in a second MSSP term must bear the risk of financial losses, this hypothetical ACO could actually be made to pay a financial penalty despite having sustained cost savings. What Are the Implications for Institutions Participating in the MSSP?
The rebasing pitfall described herein will only apply to ACOs that achieve savings in their contracts. Yet, the ease of achieving shared savings under MSSP is uncertain. Data from Haywood and Kosel, based on the Medicare Physician Group Practice Demonstration, indicate that the transition to an ACO may require significant infrastructural investments—averaging $1.7 million—with only about one half of the participating organizations receiving any shared savings over the initial 3 years to offset those costs [7]. Because participating institutions in the Demonstration Project were principally selected for their a priori high level of integration and experience, it is particularly concerning that these institutions did not fare well in the contract (recognizing
Harvey et al/The Ephemeral ACO 123
some notable contractual differences compared to MSSP). Also, a simulation model created to analyze the effects of MSSP quality measures and performance targets on Medicare costs for type 2 diabetes patients between the ages of 65 and 77 found that significant performance improvements on diabetes quality measures did not reduce Medicare costs enough to meet the 2% shared savings goals [8]. Later this year, CMS is expected to release preliminary cost and quality outcomes data for MSSP ACOs, which will provide the first insight into how participating institutions are faring. For ACOs that are able to achieve significant savings under MSSP, a few strategies seem probable for avoiding the rebasing pitfall, none of which are aligned with better care delivery. For institutions that are successful in achieving dramatic savings, they may stave off the predicament of diminishing returns with a strategy of expansion—essentially, increasing the number of covered lives to create new savings opportunities. However, too heavy a reliance on increasing market share becomes precarious, especially in competitive health care markets. Other institutions, recognizing the long-term penalty that could be incurred by substantial short-term success, may undershoot cost-savings goals in the first contract term. This practice would enable the ACO to set realistic goals for itself in subsequent agreement periods, entitling it to a “lease on life.” Lastly, a health system may limit its MSSP participation to one contractual term, during which it would pursue aggressive expenditure cuts and have the best chances of receiving shared savings. After the first 3-year contract, it would terminate MSSP participation and revert to the traditional Medicare feefor-service model, which may promise more financial gain or, at the least, less financial risk. To date, no restrictions within the body of health law forbid this type of frequent restructuring, despite the associated instability and confusion. Potential Solutions
During the public comment period for the MSSP regulations, multiple parties highlighted the herein described pitfall of the current benchmarking and rebasing method and proposed alternative solutions to CMS [5]. One suggestion was to delay rebasing across several contract periods, thereby allowing ACOs to benefit from their savings for a longer period of time. However, the legislation passed by Congress ties the hands of CMS in this matter, requiring rebasing at the beginning of each period, which is legislatively set at 3 years. Attempting to amend the Affordable Care Act to address the intrinsic issues within the MSSP is unlikely to be politically feasible in the current political atmosphere. Under section 10307 of the current legislation, however, CMS does have the authority to adopt an alternate approach to rebasing the benchmark [1]. Using this authority, CMS could establish a new method by which the benchmark is only partially rebased, thereby
allowing ACOs to receive some benefit from sustained savings, while still providing incentives for further incremental improvements. Admittedly, it can be argued that such an approach only defers the problem of diminishing returns to a later date. A second approach that addresses the current shortcomings would be to reset the benchmark against local and national expenditure data, instead of institution-specific data. This would promote continual improvements in health care savings across the multitude of participating ACOs, while not punishing the top-performing ACOs for their own success. Of course, if this approach were taken, institution-specific adjustments to expenditure data would need to be made so that hospitals disproportionally treating severely ill patients were not at an inherent disadvantage. Implications for the Radiology Community
Diagnostic imaging is one of the most important tools within the armamentarium of modern health care, but until now, radiologists have been variably integrated with—and, oftentimes, isolated from—practicing clinical teams. The rise of ACOs and shared-risk contracts have encouraged radiology groups and departments across the country to reimagine their roles as health care providers and have catalyzed a realignment of radiology services to better meet the needs of integrated ACO entities [2-4]. For some, this service redesign has included costly operational restructuring to optimally meet organizational cost and quality goals. Many assume that this flux related to transitioning to an ACO model will eventually end as ACOs and the radiology groups that serve them settle into their new roles. However, a presumption of long-term stability is threatened by the MSSP incentive structure, which sets unrealistic long-term expectations for participating ACOs. The initial flux of transitioning into the ACO model may too soon be followed by a second state of flux, as some ACOs struggle to succeed in the MSSP contract and others abandon the ACO model for traditional fee-for-service arrangements. Radiology groups and administrators should consider this potential for long-term instability before making large financial investments into potentially short-lived health care solutions. CONCLUSIONS
Current trends in this nation’s health care spending are unsustainable and many experts believe that the feefor-service system, the customary payment model for US health care, is inherently flawed. This has prompted a new wave of public and private health care delivery and payment reforms, including the use of risk-sharing arrangements under ACOs. Together, these reforms could dramatically redefine the value proposition of radiology within integrated health systems, making it imperative that radiologists understand these changes so
124 Journal of the American College of Radiology/Vol. 11 No. 2 February 2014
that they can be active contributors in framing institutional responses [2-4]. This is particularly important when the sizeable Medicare population is affected. Although health care savings must remain a primary focus of reform efforts, the regulatory bodies, hospital administrators, health care providers, and—most importantly—patients participating in this nation’s health care system also deserve stability. The current method of benchmarking and rebasing under the MSSP focuses too heavily on continual incremental savings, placing ACOs in a difficult position and making their long-term success unlikely. Moreover, this problem only stands to grow as the private insurance market models its own risk-sharing arrangements after MSSP. If the ACO model is to succeed, radiologists and the broader health care community should push CMS to reform the MSSP model to promote sustainability along with savings. Neglecting to amend MSSP may be tantamount to defeating its initial purpose: the creation of a stable alternative to the broken health care system. TAKE-HOME POINTS
The MSSP is a cornerstone of the Affordable Care Act and pushes forward the ACO model. Shared-risk contracts are the basis of the ACO model and provide incentives for efficiency and quality of care by setting health care spending limits and mandatory quality standards for participating health systems. MSSP’s current method of calculating shared savings preferentially rewards incremental rather than sustained health care savings, which places participating
ACOs in a difficult position and makes the long-term viability of the MSSP model uncertain. CMS has the legislative authority to address this shortcoming of the MSSP, and the radiology and general medical communities should advocate for CMS to take corrective action. REFERENCES 1. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010), codified in scattered sections of Titles 21, 25, 26, 29, and 42 of the United States Code. 2. Breslau J, Lexa FJ. A radiologist’s primer on accountable care organizations. J Am Coll Radiol 2011;8:164-8. 3. Abramson RG, Berger PE, Brant-Zawadzki MN. Accountable care organizations and radiology: threat or opportunity? J Am Coll Radiol 2012;9: 900-6. 4. Allen B Jr, Levin DC, Brant-Zawadzki M, Lexa FJ, Duszak R Jr. ACR white paper: Strategies for radiologists in the era of health care reform and accountable care organizations: a report from the ACR Future Trends Committee. J Am Coll Radiol 2011;8:309-17. 5. Department of Health and Human Services, Centers for Medicare & Medicaid Services. Medicare program: Medicare Shared Savings Program: accountable care organizations: final rule. Fed Regist 2011;76:67802-990. Available at: http://www.gpo.gov/fdsys/pkg/FR-2011-11-02/pdf/201127461.pdf. Accessed September 1, 2012. 6. Medicaid Managed Care Cost Savings: A Synthesis of 24 Studies. The Lewin Group. Prepared for America’s Health Insurance Plans. July 2004. Updated March 2009. Available at: http://blogs.chicagotribune.com/files/ lewinmedicaid.pdf. Accessed October 16, 2012. 7. Haywood TT, Kosel KC. The ACO model e a three-year financial loss? N Engl J Med 2011;364:e27-e27. 8. Eddy DM, Shah R. A simulation shows limited savings from meeting quality targets under the Medicare Shared Savings Program. Health Aff (Millwood) 2012;31:2554-62.
A fundamental element of health care payment reform under the Affordable Care Act is the development of Accountable Care Organizations (ACOs). The ACO model employs shared-risk contracts to better align the interests of health care providers and payers with the intent of driving efficiency and quality in care. The Medicare Shared Savings Program is the most popular of the Medicare ACO programs, with over 200 health systems across the nation participating at this time. However, a pitfall in the way that the Medicare Shared Savings Program is structured, specifically the benchmarking and rebasing method, could make it difficult for even top-performing ACOs to achieve sustained success, thereby threatening the long-term viability of the program. In this paper, we present this pitfall to the radiology community as well as potential solutions that can be considered by CMS moving forward. Key Words: Accountable Care Organization, Medicare, shared-risk, rebasing, benchmarking J Am Coll Radiol 2014;11:121-124. Copyright © 2014 American College of Radiology
INTRODUCTION
The Medicare Shared Savings Program (MSSP) is a cornerstone of the Affordable Care Act and pushes forward the Accountable Care Organization (ACO) model [1]. By realigning economic incentives among providers, ACOs are intended to enhance quality while simultaneously lowering the overall costs of health care. Under the MSSP, an ACO will receive a percentage of their health care savings, ie, a direct bonus from the federal government, if performance and cost criteria are met. These bonuses are intended to encourage medical professionals and health care systems to adopt the ACO model. Over 200 health systems in the United States are participating in the 3-year renewable MSSP contract, and many others are considering whether or not to join. Breslau, Abramson, and the ACR have written informative papers about the ACO model and its potential impact on radiology, emphasizing the a
Department of Radiology, Massachusetts General Hospital, Boston, Massachusetts.
b
Harvard Medical School, Boston, Massachusetts.
c
Massachusetts General Hospital Institute for Technology Assessment, Boston, Massachusetts. Corresponding author and reprints: Pari Pandharipande, MD, MPH, Department of Radiology, Massachusetts General Hospital, 101 Merrimac Street, Boston, MA 02114; e-mail: [email protected]. Dr Gazelle reports that he consults for GE Healthcare. Dr Pandharipande reports that she is the recipient of an NIH/NCI Career Development Award and that she receives research funding, unrelated to this work, from the Medical Imaging and Technology Alliance.
ª 2014 American College of Radiology 1546-1440/14/$36.00 http://dx.doi.org/10.1016/j.jacr.2013.07.012
importance of radiologist participation in institutional dialogue about adopting and succeeding in risksharing contracts, such as the MSSP [2-4]. In this piece, we highlight a potential pitfall of the proposed method of calculating shared savings under the MSSP, specifically the benchmarking and rebasing method, which could hinder even top-performing ACOs’ ability to achieve sustained success and threaten the long-term viability of the ACO model. THE BENCHMARKING AND REBASING PROBLEM
Under MSSP, savings are calculated by comparing actual expenditures to a benchmark value determined by CMS for each ACO [5]. This benchmark is based upon fiscal precedent, derived from a weighted average of health care costs of the specific patients assigned to that ACO in the 3 years preceding the agreement period, with annual adjustments for beneficiary characteristics and anticipated growth in Medicare fee-for-service expenditures. For an ACO to qualify for the bonus, the ACO’s average per capita Medicare expenditures must fall below this benchmark by a given percentage, known as the statutory Minimum Savings Rate, which varies from 2.0% to 3.9%, depending on an organization’s size. If the average expenditures exceed the benchmark, the ACO must pay a portion of the excess costs back to Medicare—essentially representing a financial penalty. Although ACOs can elect to avoid this downside risk during their initial MSSP agreement period, all ACOs wishing to continue to participate in the MSSP beyond 121
122 Journal of the American College of Radiology/Vol. 11 No. 2 February 2014
Fig. 1. Illustration of the rebasing problem using actual data from the Kentucky Partnership Program—a prepaid Medicaid managed care program. (A) Savings data from the Kentucky Partnership Program—a prepaid Medicaid managed care program—are used to illustrate a potential pitfall in the financial incentive structure of the Accountable Care Organization model [5]. Savings data are presented as a percentage of the estimated fee-for-service (FFS) expenditures for patients participating in the traditional FFS system. In this hypothetical example, the first 3-year MSSP contract term is defined as 1999-2001 and the second MSSP contract term as 2002-2004. (B) Savings data from the first term are used to calculate the second term benchmark level using the rebasing methodology described in MSSP. Data from 2002 and 2003 are then used to calculate the percent savings below FFS that would be required in 2004 to meet the benchmark level or the Minimum Savings Rate (MSR) level (defined here as 2% below the benchmark level) for the second contractual term. As the graph demonstrates, qualifying for the federal bonus in the second term is unlikely considering the program’s historic savings. (*Represents calendar year, rather than fiscal year.)
the initial term will be forced to participate in a 2-sided contract model that incorporates both risk and reward. The benchmark is rebased, or recalculated, at the start of each new 3-year contract term, using the method described above. Accordingly, when an ACO signs up for a second 3-year contract term, the new benchmark for that term will be calculated based on the patient health care costs from the preceding 3 years. Because the preceding 3 years represent the prior MSSP contract, the ACO’s savings during the first contract term could tighten the new benchmark. Thus, succeeding in the second term essentially means not only sustaining the health care savings of the prior 3 years, but also achieving an additional 2% to 3.9% on top of that. The current rebasing method is clearly intended to encourage ACOs to achieve continual cost improvements across multiple contract terms. However, by placing an ACO in a race against itself, the MSSP rebasing method makes shared savings increasingly difficult to generate. The extent to which any health care institution can safely and effectively generate incremental health care savings term after term is finite. Because the benchmark of the first contract period is based on a system’s historic costs, health care systems that have been committed to optimizing the efficiency of care and reducing unnecessary costs for years, such as the Mayo Clinic, will have fewer savings opportunities left in the system. Thus, such institutions could potentially face difficulty in achieving sufficient incremental savings even in the first contract period. Notably, the Mayo Clinic, touted as a model around which the ACO
system was developed, has decided not to participate in MSSP. In Figure 1, we illustrate the rebasing problem using a hypothetical ACO whose annual reported cost savings are identical to those of a prepaid Medicaid managed care program in Kentucky from 1999 to 2003 [6]. Our example demonstrates that the managed care program would have difficulty qualifying for a federal bonus in a second contract term because, in part, of its success in the first contract term. Moreover, since ACOs participating in a second MSSP term must bear the risk of financial losses, this hypothetical ACO could actually be made to pay a financial penalty despite having sustained cost savings. What Are the Implications for Institutions Participating in the MSSP?
The rebasing pitfall described herein will only apply to ACOs that achieve savings in their contracts. Yet, the ease of achieving shared savings under MSSP is uncertain. Data from Haywood and Kosel, based on the Medicare Physician Group Practice Demonstration, indicate that the transition to an ACO may require significant infrastructural investments—averaging $1.7 million—with only about one half of the participating organizations receiving any shared savings over the initial 3 years to offset those costs [7]. Because participating institutions in the Demonstration Project were principally selected for their a priori high level of integration and experience, it is particularly concerning that these institutions did not fare well in the contract (recognizing
Harvey et al/The Ephemeral ACO 123
some notable contractual differences compared to MSSP). Also, a simulation model created to analyze the effects of MSSP quality measures and performance targets on Medicare costs for type 2 diabetes patients between the ages of 65 and 77 found that significant performance improvements on diabetes quality measures did not reduce Medicare costs enough to meet the 2% shared savings goals [8]. Later this year, CMS is expected to release preliminary cost and quality outcomes data for MSSP ACOs, which will provide the first insight into how participating institutions are faring. For ACOs that are able to achieve significant savings under MSSP, a few strategies seem probable for avoiding the rebasing pitfall, none of which are aligned with better care delivery. For institutions that are successful in achieving dramatic savings, they may stave off the predicament of diminishing returns with a strategy of expansion—essentially, increasing the number of covered lives to create new savings opportunities. However, too heavy a reliance on increasing market share becomes precarious, especially in competitive health care markets. Other institutions, recognizing the long-term penalty that could be incurred by substantial short-term success, may undershoot cost-savings goals in the first contract term. This practice would enable the ACO to set realistic goals for itself in subsequent agreement periods, entitling it to a “lease on life.” Lastly, a health system may limit its MSSP participation to one contractual term, during which it would pursue aggressive expenditure cuts and have the best chances of receiving shared savings. After the first 3-year contract, it would terminate MSSP participation and revert to the traditional Medicare feefor-service model, which may promise more financial gain or, at the least, less financial risk. To date, no restrictions within the body of health law forbid this type of frequent restructuring, despite the associated instability and confusion. Potential Solutions
During the public comment period for the MSSP regulations, multiple parties highlighted the herein described pitfall of the current benchmarking and rebasing method and proposed alternative solutions to CMS [5]. One suggestion was to delay rebasing across several contract periods, thereby allowing ACOs to benefit from their savings for a longer period of time. However, the legislation passed by Congress ties the hands of CMS in this matter, requiring rebasing at the beginning of each period, which is legislatively set at 3 years. Attempting to amend the Affordable Care Act to address the intrinsic issues within the MSSP is unlikely to be politically feasible in the current political atmosphere. Under section 10307 of the current legislation, however, CMS does have the authority to adopt an alternate approach to rebasing the benchmark [1]. Using this authority, CMS could establish a new method by which the benchmark is only partially rebased, thereby
allowing ACOs to receive some benefit from sustained savings, while still providing incentives for further incremental improvements. Admittedly, it can be argued that such an approach only defers the problem of diminishing returns to a later date. A second approach that addresses the current shortcomings would be to reset the benchmark against local and national expenditure data, instead of institution-specific data. This would promote continual improvements in health care savings across the multitude of participating ACOs, while not punishing the top-performing ACOs for their own success. Of course, if this approach were taken, institution-specific adjustments to expenditure data would need to be made so that hospitals disproportionally treating severely ill patients were not at an inherent disadvantage. Implications for the Radiology Community
Diagnostic imaging is one of the most important tools within the armamentarium of modern health care, but until now, radiologists have been variably integrated with—and, oftentimes, isolated from—practicing clinical teams. The rise of ACOs and shared-risk contracts have encouraged radiology groups and departments across the country to reimagine their roles as health care providers and have catalyzed a realignment of radiology services to better meet the needs of integrated ACO entities [2-4]. For some, this service redesign has included costly operational restructuring to optimally meet organizational cost and quality goals. Many assume that this flux related to transitioning to an ACO model will eventually end as ACOs and the radiology groups that serve them settle into their new roles. However, a presumption of long-term stability is threatened by the MSSP incentive structure, which sets unrealistic long-term expectations for participating ACOs. The initial flux of transitioning into the ACO model may too soon be followed by a second state of flux, as some ACOs struggle to succeed in the MSSP contract and others abandon the ACO model for traditional fee-for-service arrangements. Radiology groups and administrators should consider this potential for long-term instability before making large financial investments into potentially short-lived health care solutions. CONCLUSIONS
Current trends in this nation’s health care spending are unsustainable and many experts believe that the feefor-service system, the customary payment model for US health care, is inherently flawed. This has prompted a new wave of public and private health care delivery and payment reforms, including the use of risk-sharing arrangements under ACOs. Together, these reforms could dramatically redefine the value proposition of radiology within integrated health systems, making it imperative that radiologists understand these changes so
124 Journal of the American College of Radiology/Vol. 11 No. 2 February 2014
that they can be active contributors in framing institutional responses [2-4]. This is particularly important when the sizeable Medicare population is affected. Although health care savings must remain a primary focus of reform efforts, the regulatory bodies, hospital administrators, health care providers, and—most importantly—patients participating in this nation’s health care system also deserve stability. The current method of benchmarking and rebasing under the MSSP focuses too heavily on continual incremental savings, placing ACOs in a difficult position and making their long-term success unlikely. Moreover, this problem only stands to grow as the private insurance market models its own risk-sharing arrangements after MSSP. If the ACO model is to succeed, radiologists and the broader health care community should push CMS to reform the MSSP model to promote sustainability along with savings. Neglecting to amend MSSP may be tantamount to defeating its initial purpose: the creation of a stable alternative to the broken health care system. TAKE-HOME POINTS
The MSSP is a cornerstone of the Affordable Care Act and pushes forward the ACO model. Shared-risk contracts are the basis of the ACO model and provide incentives for efficiency and quality of care by setting health care spending limits and mandatory quality standards for participating health systems. MSSP’s current method of calculating shared savings preferentially rewards incremental rather than sustained health care savings, which places participating
ACOs in a difficult position and makes the long-term viability of the MSSP model uncertain. CMS has the legislative authority to address this shortcoming of the MSSP, and the radiology and general medical communities should advocate for CMS to take corrective action. REFERENCES 1. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010), codified in scattered sections of Titles 21, 25, 26, 29, and 42 of the United States Code. 2. Breslau J, Lexa FJ. A radiologist’s primer on accountable care organizations. J Am Coll Radiol 2011;8:164-8. 3. Abramson RG, Berger PE, Brant-Zawadzki MN. Accountable care organizations and radiology: threat or opportunity? J Am Coll Radiol 2012;9: 900-6. 4. Allen B Jr, Levin DC, Brant-Zawadzki M, Lexa FJ, Duszak R Jr. ACR white paper: Strategies for radiologists in the era of health care reform and accountable care organizations: a report from the ACR Future Trends Committee. J Am Coll Radiol 2011;8:309-17. 5. Department of Health and Human Services, Centers for Medicare & Medicaid Services. Medicare program: Medicare Shared Savings Program: accountable care organizations: final rule. Fed Regist 2011;76:67802-990. Available at: http://www.gpo.gov/fdsys/pkg/FR-2011-11-02/pdf/201127461.pdf. Accessed September 1, 2012. 6. Medicaid Managed Care Cost Savings: A Synthesis of 24 Studies. The Lewin Group. Prepared for America’s Health Insurance Plans. July 2004. Updated March 2009. Available at: http://blogs.chicagotribune.com/files/ lewinmedicaid.pdf. Accessed October 16, 2012. 7. Haywood TT, Kosel KC. The ACO model e a three-year financial loss? N Engl J Med 2011;364:e27-e27. 8. Eddy DM, Shah R. A simulation shows limited savings from meeting quality targets under the Medicare Shared Savings Program. Health Aff (Millwood) 2012;31:2554-62.
