Managed Care – October 2018

Letter To The Editor

MSSP risk free, not saving money? That’s ‘insane’

Reliance ACO is a Track 1 that started in 2014. We have saved CMS over $32 million and have received money back in two of the four years. We also have a Next Gen product that is a risk program.

I want to scream when anyone, including Seema Verma, says we are not at risk [“With CMS Demanding More Accountability in the MSSP, Will It Be ACOs Overboard?”, September 2018 MANAGED CARE].

We are physician-owned and operated. We employ 20 people. We started with 14,000 beneficiaries in 2014 and have grown to just under 40,000 this year.

The average administrative cost for an ACO is between 1% and 3% of the Medicare spend. We will spend $4 million this year on administrative cost; last year, we spent $3.5 million. Although we saved CMS $3.5 million, we did not qualify for shared savings.

We receive no subsidy from a hospital or anyone else.

Our doctors have been at real risk. We risked $3.5 million and after CMS changed the rules after our contract started, we received nothing.

Meanwhile, we have reduced the average patient cost from over $12,700 a year to $11,300.

It is insane to believe that if we leave the program CMS will be better off. The hospitals that we engage with to reduce unnecessary admissions will go back to admitting everyone without oversight. The nursing homes that we engage with and have helped reduce the average length of stay by over eight days ($500 a day average=$4,000 a patient) will go back to their old ways.

CMS claims they did not save money. In addition to their faulty analysis, it defies common sense. Their claim is that if doctors did nothing, they would spend less money. They only paid out if the ACO saved money. If the ACO did not save money, CMS is no worse off. They are somehow assuming that if the ACO did not exist and did nothing costs would go down. Really?

CMS can impose any rules they want, but cutting off ACOs that are actually saving them money is not a wise policy.

Gene Farber

Chief Operating Officer

Reliance ACO

Farmington Hills, Mich.

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