Preparing Your ACO For Downside Risk Success

Mark Hefner
Infina Connect

If you are part of an ACO or a clinically integrated network (CIN), you have begun the value-based care journey. As payment models continue to change, the question of how and when to increase appropriate risk and reward requires careful consideration. With the release of the final rule for Pathways to Success, CMS is increasingly pushing ACOs toward two-sided risk, and most commercial payers aren’t far behind.

The success of the 2017 Next Generation ACO Model, a CMS initiative that provides experienced ACOs with a higher level of reward for taking on higher levels of financial risk, is strong evidence that ACOs with more at stake financially generate more savings. According to a Health Affairs blog post published last year, in just the second year of the program’s existence, the 2017 cohort of Next Generation ACOs generated $164 million in savings, an average of $3.7 million per ACO. In comparison, Medicare Shared Savings Plan ACOs achieved a net savings of $314 million during the same time period, but that works out to just an average of $668,000 per ACO.

Health care reimbursement really is shifting away from fee-for-service payment. It’s not just talk. Providers will be taking on risk and having the proverbial “skin in the game” for total quality and total cost of care. Is your ACO prepared for that?

Referral coordination—the missing link

Today, most organizations have not focused efforts on coordinating care within a high-value referral network. Individual practices tend to send referrals via e-fax or paper and their coordination tool is the phone, often resulting in a “fire and forget” approach to referrals. Seldom does a practice realize the actual impact of their referrals from the perspectives of quality and cost.

In a risk-based world, ACOs and CINs that aren’t taking a proactive approach to referral network management put themselves at risk of effectively outsourcing clinical work to other providers who have no clinical or financial alignment with their ACO. All your efforts to improve quality and control costs may go down the drain as a result. The effectiveness of your primary care providers in placing and coordinating the care of their patients with high-value specialists is a vital success factor in preparing for increased accountability.

Managing downstream costs

Risk-bearing organizations can no longer afford to leave physician referrals unmanaged, given their very significant impact on downstream cost, quality, and revenue. Optimizing referrals doesn’t happen over-night, but it’s achievable when you identify your goals and put the right operational pieces in place.

The good news is that you don’t have to change your existing organizational structure to optimize referral placement and coordination. Even if your primary care physicians are referring to specialists outside the ACO, you can be very successful through high-value referral co-management agreements. The key is communicating to your specialist partners both in and outside your ACO your goals and expectations regarding coordination of referred care, and then measuring how well they perform.

Patient referrals are a perfect indicator of patient health issues and increasing cost. With a high-value network in place and a shared, common technology platform measuring and tracking referral activity, you’ll quickly be able to identify opportunities to manage downstream cost and quality. Rather than looking at retrospective claims analysis and seeing what’s happened after the fact, you can begin to use your referral process as a mechanism to place patients with high-value providers in optimal ways, exchange clinical information, coordinate care, and ensure that patients are seen promptly.

The immediate benefits to your ACO, providers, patients, and payers will make the effort worthwhile. You will also prepare your ACO for greater success and growth under increased accountability in the future.

Mark Hefner is the CEO of Infina Connect, a software company with referral coordination capabilities.

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