Whether you are a small ACO, new to taking on financial risk, or a large and profitable ACO eyeing new opportunities, your strategy should include evaluating your provider selection and expanding your organization’s network.
Over the last decade, CMS has been experimenting with different payment models, promoting our health system’s evolution from a fee for service to one based on the value of care. CMS continues to aggressively incentivize value based payment models, including new direct contracting (DC) options, relaxations of anti kickback regulations for value based entities (VBE), and promoting the rapid growth of MA plans. In response to these new opportunities, large insurers and private equity are now entering the market and are actively recruiting new providers into their networks. ACOs that are not focusing on their provider selection and network are vulnerable to losing provider partners along with the patients they bring into the ACO. To choose the right providers for your ACO, you need the right data.
How does data-driven participant selection give your ACO a competitive edge?
As more entities enter the market, the competition over patient alignment will continue to increase. The easiest way to grow your patient population is to partner with new providers. However, the patients a provider will bring into the ACO is not the only aspect to consider. Before starting a conversation with a new provider you’ll want to know more about their practice to know if they are a good fit, and discuss any potential issues before any contract is signed. Are their patients’ expenses high or their risk scores low, compared to comparable peers? Are they currently referring patients to high cost specialties or competitor health systems? These are not disqualifying data points, but instead can help drive the conversation to see if they are a good fit for your ACO. If a provider has high expenses and low risk scores, but is open to managed care practices, this in fact will increase your benchmark and make cost reductions more impactful.
While provider fit will be unique to each organization’s growth strategy and its capabilities, there are three important factors to keep in mind:
- How many, and what patient population will this provider will align to ACO?
- What specialist providers and hospital systems does the provider refer patients to?
- Are these providers the right fit with your current strategy and capabilities?
Every ACO or VBE will approach these questions differently, but they cannot be answered without data-driven insight into providers in your market.
To better understand these questions, here are two examples:
- A small ACO not looking to dramatically expand, but wants to stay competitive and profitable:
- A large ACO considering aggressively expanding or considering transitioning to a DC option. These two ACOs would be looking for two very different providers.
The small ACO would be looking for PCP providers without high needs patient populations they do not have the capabilities to manage, who already refer patients to specialist providers in your network (or at least lower cost specialists) and have a stable practice history (aka few surprises you’ll have to deal with). In short, you are looking for conservative stable providers to match your ACO.
However, the large ACO looking to possibly grow into a DC, will be looking for PCP providers who are growing their practices year over year to align new patients each year, and have patient populations which align strongly with the care coordination capabilities of the organization. If your organization has the capacity to support providers with the tools they need to manage high-cost care, then partnering with providers with a history of high expenses would ensure a higher benchmark comparison and make it easier to achieve Shared Savings.