As ACOs grow, new payment models explored

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MANAGED CARE August 2011. ©MediMedia USA

If accountable care organizations (ACOs) are to reach their full potential, the traditional fee-for-service approach that dominates today must be revised. As the ACOs take form, payers look to establish shared-savings programs and other payment models in an effort to create financial incentives for high-quality care.

A new report from the Commonwealth Fund, titled “Promising Payment Reform: Risk-Sharing With Accountable Care Organizations,” summarizes the research conducted on the ACO shared-risk payment models, with a specific focus on private insurers. For the review, the models had to include these criteria: a provider risk-sharing component, a broad array or full continuum of patient care/services, and meaningful quality incentives. Four approaches to shared-risk payment are: bonus payment at risk, market share risk, risk of baseline revenue loss, and financial risk for all or part of the patient population.

Key findings:

• Payer-provider shared-risk models are in the early stage of development. Other than the traditional capitated HMO, there are few operational shared-risk models.
• Definitions of shared risk vary, and shared-risk programs use a variety of program designs.
• Providers lack the infrastructure needed to take on and manage risk, but some payers are providing support.
• Shared-risk models have evolved from shared-savings programs.

Eight shared-risk models

Of models that are operational, three of the eight began operation early this year. The longest-standing shared-risk program is Medica Health Plan, launched in 2008, followed by Blue Cross Blue Shield of Massachusetts, begun in 2009.

Source: Delbanco SF, Anderson KM, Major CE, Kiser MB, et al. Promising payment reform: Risk-sharing with accountable care organizations. The Commonwealth Fund, July 2011