Milliman offers ACO cheat sheet
Actuarial firm Milliman has released an accountable care organization (ACO) cheat sheet to guide stakeholders through the ins and outs of Medicare Shared Savings Program and the Pioneer ACOs.
“Healthcare costs have been on the rise over the last few years and there are growing concerns over the financial stability of the Medicare program,” wrote author Robert Parke, principal, consulting Actuary at Milliman, and colleagues. “There are also concerns regarding the aging of the baby boomers, the increase in average age of enrollees and an insufficient tax base to cover future funding of the Medicare program. The Patient Protection and Affordable Care Act attempts to address some of these growing concerns by implementing laws and programs aimed at reducing healthcare costs. The Medicare Shared Savings Program (MSSP) as well as the Pioneer program are two such initiatives.”
Parke and colleagues wrote that providers may want to form ACOs and participate in these programs for many reasons, including the need to increase or maintain market share and the possibility of sharing in savings resulting from improved care coordination.
One of the major differences between the two programs is the Pioneer program uses a trending methodology that, all other things equal, produces a slightly higher benchmark than the MSSP, for high-cost areas. Additionally, the MSSP program uses the Centers for Medicare & Medicaid-Hierarchal Condition Category (CMS-HCC) to reflect the risk mix of the aligned beneficiaries while the Pioneer program revises the benchmark every performance year by removing claims for beneficiaries no longer aligned with the ACO or including expenditures for beneficiaries that become newly aligned with the ACO.
“The Pioneer program inherently includes more risk but also provides greater rewards (through lower minimum savings rates, higher sharing rates and higher payment limits),” the authors wrote. “The Pioneer program requires 50 percent of the Pioneer ACOs revenues come from participating in ‘risk’ contracts with payors.”
Access the paper on Milliman’s website.
“Healthcare costs have been on the rise over the last few years and there are growing concerns over the financial stability of the Medicare program,” wrote author Robert Parke, principal, consulting Actuary at Milliman, and colleagues. “There are also concerns regarding the aging of the baby boomers, the increase in average age of enrollees and an insufficient tax base to cover future funding of the Medicare program. The Patient Protection and Affordable Care Act attempts to address some of these growing concerns by implementing laws and programs aimed at reducing healthcare costs. The Medicare Shared Savings Program (MSSP) as well as the Pioneer program are two such initiatives.”
Parke and colleagues wrote that providers may want to form ACOs and participate in these programs for many reasons, including the need to increase or maintain market share and the possibility of sharing in savings resulting from improved care coordination.
One of the major differences between the two programs is the Pioneer program uses a trending methodology that, all other things equal, produces a slightly higher benchmark than the MSSP, for high-cost areas. Additionally, the MSSP program uses the Centers for Medicare & Medicaid-Hierarchal Condition Category (CMS-HCC) to reflect the risk mix of the aligned beneficiaries while the Pioneer program revises the benchmark every performance year by removing claims for beneficiaries no longer aligned with the ACO or including expenditures for beneficiaries that become newly aligned with the ACO.
“The Pioneer program inherently includes more risk but also provides greater rewards (through lower minimum savings rates, higher sharing rates and higher payment limits),” the authors wrote. “The Pioneer program requires 50 percent of the Pioneer ACOs revenues come from participating in ‘risk’ contracts with payors.”
Access the paper on Milliman’s website.