[A] network of private physician practices plans to withdraw from a Medicare management program because its incentive payments are too difficult to attain.
Healthfirst Inc. is an association of about 40 independent physician practices that co-owns an Accountable Care Organization for its members. For more than two years, Healthfirst participated in a Medicare shared-savings program. The program sets a benchmark for what it should cost to treat a Medicare beneficiary and if the ACO’s participants can treat them for less, while meeting care quality standards, the provider splits the savings with the federal government.
Shared-savings programs were popularized through the Affordable Care Act as a way to improve care while reducing costs — the primary goal of health reform in the U.S. Healthfirst was able to meet the program’s quality standards, but did not qualify for incentive payments.
None of Vermont’s ACOs earned Medicare savings for their member providers. That could lead others to drop the program, too, next year when ACOs will be required to take on downside risk, meaning if they exceed the benchmark they will owe Medicare money.
ACO shared-savings programs are the most visible payment reform initiative in Vermont. The state, through the Green Mountain Care Board and its $45 million federal State Innovation Model grant, has invested heavily in their success.
Two state-based shared-savings programs, one for Medicaid and one for Blue Cross Blue Shield of Vermont’s customers on the Vermont Health Connect exchange, began last year.
The first-year results from those programs won’t be available for several months. If they’re not generating savings for ACO members, they, too, could lose participants. Healthfirst will remain in the Blue Cross program and was never part of the Medicaid one. That’s because the benchmarks for treating Medicaid patients were too low, making it unlikely its doctors would earn savings, the organization has said.
The problem with the Medicare program for Healthfirst is that the benchmark amount to treat Medicare patients is based on Vermont’s already low per capita Medicare spending, according to Amy Cooper, Healthfirst’s executive director.
At the same time, the threshold for how much ACOs need to save Medicare in order to qualify for incentive payments doesn’t account for regional variations in how much is being spent on Medicare patients in the first place. Participants from areas of the country that trail Vermont in managing the health of Medicare patients, therefore, are in a better position to earn savings, Cooper said.
“We’ve learned over the past couple of years that the way the Medicare ACO program is currently designed is not necessarily favorable to patients or physicians in networks that have already been providing cost-conscious, high-value health care services,” she said in a statement announcing the decision.
Healthfirst ACO members treat 7,500 Medicare beneficiaries. It will consider returning to the program in 2016 when the federal Centers for Medicare and Medicaid Services is expected to revise the rules, Cooper said. If the new rules account for regional differences in the potential savings for Medicare, Healthfirst would consider rejoining the program, she said.
Vermont has two other Accountable Care Organizations, OneCare Vermont, which includes all of the state’s hospitals and Dartmouth-Hitchcock Medical Center in New Hampshire, and Community Health Accountable Care, which includes many of the state’s federally qualified health centers.
Healthfirst said it will continue to focus on other value-based payment arrangements with public and private payers, according to its statement.
“While we are disappointed that the current Medicare ACO model turned out not to be sustainable for us and our patients, the experience enabled us to lay the groundwork for improved collaboration, both among physicians within the network and with other providers throughout the continuum of care,” said Joe Haddock, a Family Medicine physician in Williston and chair of the Healthfirst ACO’s board.