Members of the U.S. House of Representatives this week introduced bipartisan legislation to strengthen Medicare’s value-based care models and accountable care organizations (ACOs), among other alternative payment models (APMs).
Doctors, hospitals and other providers make up an ACO — the group coordinates care for Medicare patients while limiting extraneous services and preventing medical errors. The better the outcome, the more bonuses an ACO may receive.
Within the context of a skilled nursing facility, ACOs have been a contentious program, with some operators considering starting their own ACOs after the initial push for Medicare Advantage and value-based models neglected to include SNFs in the conversation.
ACO-SNF partnerships are looking better to ACOs at this point in the pandemic though, as they see an opportunity to drive down costs and improve performance metrics through the skilled nursing sector.
SNFs, on the other hand, may be more inclined to create their own ACO and “really do some experimentation” with the model, Avalere Health’s Fred Bentley said in a previous Q&A with SNN; Bentley is managing director for the Washington, D.C.-based health care consulting firm.
The Value in Health Care Act of 2021, introduced by Reps. Peter Welch (D-Vt.), Suzan DelBene (D-Wash.), Darin LaHood (R-Ill.) and Brad Wenstrup (R-Ohio), continues the move away from Medicare’s fee-for-service model, extending a 5% incentive payment for six years for providers that continue to utilize an APM.
The bill also includes studies to assess Medicare APM overlap and a report discussing health outcomes and racial disparities in ACO/APM patients compared to traditional Medicare.
In a letter to House representatives named on the bill, the National Association of ACOs said the legislation comes at a “critical juncture” for the value-based care movement, with estimates currently showing almost 40% of health care dollars tied to value-based payment.
The Trump administration dropped rates to 40% for ACOs and APMs, while asking them to take on more risk sooner, reports say — legislation would bump recouped costs up to 50-60% and give newly created ACOs three years before they’d have to take on more risk.
“The reforms in this legislation will further strengthen ACOs and APMs and ensure their continued success,” the association said in its letter. “We are pleased that the bill provides appropriate shared savings rates, modifies risk adjustment methodologies, removes barriers to participation, ensures fair and accurate benchmarks, and provides educational and technical support for ACOs.”
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) expressed disappointment that the legislation treats skilled nursing providers as “contractors” rather than “dynamic participants.”
“Skilled nursing providers should be active leaders in alternative payment models and value-based purchasing arrangements. We hope to work with the bill’s sponsors and other members of Congress to create meaningful options for post-acute and long term care providers to lead ACO initiatives, as well as protect access to care for Medicare beneficiaries,” the organization said in a statement.
There are 512 ACOs as of January, serving 12 million beneficiaries, according to the ACO Association.
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