When first arriving on the scene in 2012, accountable care organizations (ACO) were relatively unknown. This was true both in the literal sense of the term – there were only 27 ACOs nationwide at the outset, according to the Centers for Medicare & Medicaid Services – and from a standpoint of whether they actually yielded savings for healthcare participants.

Fast-forward to today where ACOs number more than 560.  In addition, they have cut costs for medical facilities by an impressive $314 million in 2017 alone. This fact alone explains why ACOs have blossomed in their quantity.  What remains somewhat lesser known, at least to outside observers who have yet to collaborate with an ACO but are considering the idea, is the Medicare Shared Savings Program  (MSSP) itself and the best “track” that they should consider joining. Based on a recent study, one may be more potentially rewarding than all the rest.

A brief breakdown on the MSSP ‘track’ system

As described by the Physicians Advocacy Institute, the MSSP has four different “tracks,” or levels, that ACO participants can join. Numbered 1 through 3 – with the latest one, Track 1+, launching late last year – each track corresponds to the amount of money medical facilities stand to earn in cost savings in conjunction with the level of risk they’re willing to assume. The higher the number, the greater the risk, but also the potential reward. Perhaps unsurprisingly, the vast majority of ACO participants at present are in the one with the lowest degree of risk (Track 1) at 82%. This means that they do not need to pay into the Medicare program should they underperform financially in a given performance year.

As the previously mentioned study revealed, ACOs have recouped a substantial amount of cost savings regardless of the track they’ve since joined. However, had more taken part in Track 1+ at the outset, which launched officially in 2018, it would qualify them for the 5% bonus payment program. The Track 1+ program has produced a substantial amount of financial returns for eligible participants in the early going.

“By assuming more risk, participating ACOs stand to earn a lump-sum bonus of 5% in Medicare Part B expenditures.”

What is the 5% bonus payment program all about?

Installed by Congress, the 5% bonus payment program is an incentive-laden Medicare repayment system. When participating ACOs assume more risk, they stand to earn a lump-sum bonus of 5% in Medicare Part B expenditures. The actual amount recouped depends upon the quality of care delivered (e.g. better health outcomes, fewer unnecessary tests, reduced readmission rates, etc.). This hybrid model isn’t quite as risk-bearing as Tracks 2 or 3, but higher than Track 1. Adherents to Track 1+ say that it serves as a good go-between.

Although it’s still early, only 10% of participating ACOs are part of Track 1+, according to government data. Had a greater portion of healthcare practitioners decided to join, however, more than 90% of ACOs would have received funds from the 5% payment program, according to a separate study done by Avalere. That’s the numerical equivalent of 372 ACOs experiencing a net positive financial impact, or what amounts to an aggregate of $1.2 billion in incentive payments.

Avalere Director John Feore said the success and growth potential of the 5% repayment program will likely encourage even more practitioners to more fully buy into the ACO concept.

“CMS is eager to encourage more ACOs to take on performance-based risk,” Feore explained. “With the incentive payments and increasing comfort with the Medicare Shared Savings Program, risk-based ACOs will continue to grow in the coming years.”

The importance of good data to the success of an ACO

An ACO is only as effective as the hospitals, clinics, practitioners and federally qualified health centers that represent it. The same can be said for its data. At Tangible Solutions, our No. 1 priority is delivering high-quality health data to the medical professionals who use it to inform their diagnoses and care decisions. We’re a one-stop, all-inclusive services provider that not only has the means to collect data but warehouse it, transform it, and – perhaps most importantly of all – transport it to its proper location seamlessly and on time. Please contact us to learn more.

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