​As providers adapt to changing dynamics in care and payment models, Fred Bentley, MPP, MPH, managing director, ATI Advisory, said, “There are some very real opportunities for providers to partner with accountable care organizations (ACOs).” Speaking about “From Threat to Opportunity: The LTC-Focused ACO Model” at the 2023 AHCA/NCAL Convention and Expo, Bentley talked about some of these opportunities as well as some pitfalls to avoid.

While ACOs and value-based care are certainly not new, there is a new urgency for providers to understand them and their role in post-acute and long term care. The Centers for Medicare & Medicaid Services (CMS) has announced a goal of all Medicare beneficiaries being involved in a value-based care model by 2030.

The world of value-based care can seem like multiple puzzle pieces that are challenging to put together. Bentley offered a few basics to pull the pieces together. First of all, he noted that primary care is at the center, with entities accountable for efficiency, quality, and associated costs of care delivered for a population of patients. Fee-for-service (FFS) beneficiaries are assigned to ACOs based on where they receive primary care. This alignment can happen prospectively or retrospectively based on who was seen. ACOs, he said, receive FFS payments throughout the year and then receive their bonus at the end of the year after the reconciliation process.

The goal, he said, is to keep costs below benchmark. “Annual spending targets are based on historical and geographic spending patterns,” Bentley said, adding, “Participants generate bonuses—or penalties—based on actual spending relative to predetermined targets. Providers still receive regular fee-for-service reimbursements throughout the year.” However, he added, “If your spending exceeds the benchmark, you may be on the hook for penalties. This is a typical model.”

The Alphabet Soup of ACOs

There are several types of ACOs, Bentley noted, but he focused on two. First, he said, there is the Medicare Shared Savings Program (MMSP) ACO. This has all the hallmarks of a traditional ACO, he said. “This is a lower risk-lower reward model and the most common form of ACO you will encounter. It has essentially been around since 2012, yet we are just starting to see it in long term care.” He noted that one challenge is that this model is rooted in primary care. So, Bentley said, unless you own a primary care practice, you may have a hard time participating in this model. However, he added that this is starting to change. Today, he said, there are a few different MSSP ACOs getting involved in long term care.

The hallmark of these types of ACOs include voluntary provider participation, provider accountability for efficiency and quality, payment incentives to improve care and slow cost growth, performance measurement to ensure optimum care delivery, and defined patient population (assigned or enrolled). The care delivery design involves access and continuity, care management, comprehensive coordination, and patient and caregiver engagement.

Bentley then talked about the REACH ACO model, which is both high risk and high reward. “This is for providers who don’t have or need training wheels. This is not for the faint of heart.” However, he noted that there are flexibilities such as they can apply for a three-day waiver so you can do direct admissions. This model targets the high-needs population—the most expensive, clinically complex Medicare beneficiaries. Starting next year, CMS will allow beneficiaries who have 90 days of home health or who have been in a nursing home for 45 days to apply for this track. “These are long term care residents—the sickest of the sick. That is an important development in the ACO space,” said Bentley. 

To be part of a REACH ACO, providers must agree to participate in the model and contribute to the REACH ACO’s goals, and they can participate as either a “participant provider” or a “preferred provider.” Participant providers are used to align beneficiaries to the ACO. They are required to accept payment from the ACO through their negotiated payment arrangement with the ACO, continue to submit claims to Medicare, and accept claims reduction. A preferred provider can contract with the REACH ACO, accepting payments from it through a negotiated payment arrangement. They will continue to submit claims to Medicare, but they aren’t used to align beneficiaries to the ACO.

It is well documented, Bentley noted, that when a typical ACO launches, and they are looking for savings, “They look to you. It’s low-hanging fruit to divert patients away from skilled nursing facilities (SNFs) or shorten their SNF stays to reduce spending.” To connect effectively with ACOs, he suggested, “The easiest way to shift your mindset is to think about the two different resident populations you manage. ACOs have been going after short-stay post-acute business, but your long-stay population is where there are interesting opportunities.” There is a lot of spending involved for these long stays, so there are “meaningful opportunities to eliminate some of that spend. If you can reduce hospitalizations, emergency department visits, specialist visits, etc,,” Bentley said, noting that there are a growing number of organizations getting into this space and looking to set up ACOs and partners with SNFs.

Finding the Right Fit

It is important for providers to know what they have in terms of capabilities, outcomes, and resources and what type of ACO might be the best fit for them. Toward that end, they should consider evaluating potential partners’ core competencies regarding electronic connectivity, patient engagement, clinical operations, business operations, network development, and data and analytics. “Operators also need to assess ACOs’ experience, track record, and cultural fit,” Bentley said.

This all may sound complicated and like a lot of work at a time when staffing and other challenges continue. However, Bentley noted that are numerous benefits of an ACO-SNF partnership. For instance, multiple studies of ACO performance have determined that ACOs achieve savings by driving down SNF utilization. Elsewhere, some ACOs can negotiate and manage FFS payments for providers, including SNFs; and there are many examples of ACOs offering discounted rates to SNFs to be part of their network.  One “absolute benefit” of working with an ACO, Bentley said, is access to more clinical data and resources. These are incredibly valuable, he said, and can help reduce staff burden and improve care coordination.

“You can earn performance incentives. If the ACO achieves their share of savings and you hit certain performance targets, you get a portion of savings,” Bentley said. “You can use this money to bump salaries, hire new staff, or other efforts. That is one way you benefit financially.” However, he noted, “For a variety of reasons, the anticipated increase in referrals often does not materialize for SNFs.”

An ACO could set performance benchmarks and “ask you to have more skin in the game, though this generally doesn’t happen,” Bentley said. However, he stressed that the ACO has to generate savings to have shared savings. “If they hit their targets and you hit yours, you qualify for bonus payments.” The most common target is hospitalizations. He said, ACOs want everyone laser-focused on preventing hospitalizations because they are one of the most expensive cost centers.

Providers need to weigh the strategic, financial, and clinical value of an ACO partnership against the potential downsides. Ultimately, however, “accountability is coming,” said Bentley. Post-acute and long term care organizations that resist the call of ACOs will still be held accountable by CMS. It behooves every provider to position themselves to take on accountable care partners and start incorporating a value-based care mindset into every aspect of daily work.

Joanne KaldyBentley said, “Getting into risk-based care without taking a lot of risk can help you manage patients effectively while keeping the costs of care down. This is fundamental to doing well in value-based care.”

Joanne Kaldy is a freelance writer and communications consultant based in New Orleans.