Earlier this month, CMS laid down a final rule that rewrote—or at least revised—the book on accountable care organization (ACO) participation. We’ll dive into the deets in a minute, but the key takeaway here is that this rule represents yet another leap toward the transition to a value-based healthcare payment environment.

We’ve said it before, and we’ll say it again: when it comes to pushing the healthcare system to deliver more and spend less, the federal government isn’t messing around. The way CMS sees it, the more providers—especially large hospital systems—that migrate to the ACO frontier, the better. So, to help facilitate that migration, CMS has:

  1. Updated the benchmarking methodology used to determine shared savings and losses, and
  2. Created new participation options designed to encourage ACOs to stick with the model now—but take on greater performance-based risk down the road.

Let’s look at each of those objectives a little more closely:

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Regional Benchmark Reboot

Under the Medicare Shared Savings Program (MSSP)—a.k.a. Medicare’s ACO program—spending benchmarks are currently calculated according to national Medicare expenditure data. Of course, just like any other good or service, the cost of healthcare varies by region—and that puts providers operating in high-cost areas in a real pinch. To level the playing field, CMS announced that for an ACO’s second agreement period—and for all agreement periods beginning January 2017 or later—benchmark totals will reflect regional spending data (agreement periods typically last three years). Furthermore, CMS will update benchmarks each year to ensure they account for differences between regional fee-for-service spending data and the ACO’s own historical spending data.

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Downside Deferment

ACOs entering the MSSP have their choice of three participation tracks:

  • In Track One, ACOs share in savings only (i.e., there is no downside risk).
  • In Track Two and Track Three, ACOs share in both savings and losses (i.e., there is both upside and downside risk).

To encourage greater risk acceptance later on, CMS is now allowing ACOs to extend their agreement periods to four years if they agree to join Track Two or Track Three at the conclusion of the fourth year. This option will be available when the 2017 application cycle begins.

CMS also denoted the window of opportunity for ACOs to reopen a determination of the amount of savings earned or the amount of losses owed: While CMS may reopen any past determination, participants must reopen a determination within four years of the initial notice.

What does this all mean for outpatient PT?

The whole point of these improvements is to ensure participants are appropriately incentivized for providing high-value care (i.e., better care at a lower cost). As CMS Acting Administrator Andy Slavitt said in this news release, “[These] changes will encourage more physicians to improve patient care by joining [ACOs], while also refining how the program measures success, so that current participants are better rewarded for quality.” And as the number of ACO participants grows, so, too, will the demand for providers who offer better care at a lower cost—and physical therapists certainly fit that bill.

Furthermore, evidence shows that the earlier a PT-eligible patient begins physical therapy treatment, the better. As PT industry thought leader Larry Benz is quoted as saying in this blog post, “We believe that our value is really part of what I often refer to in old military terms as the force multiplier, or the ability for physical therapy to not be looked at in a siloed class, but how...we impact concurrent upstream and downstream costs of an episode of care.”

Thus, it behooves ACO leadership to ensure their organization’s patients have adequate—and early—access to quality physical therapists. And the most logical way to do that: include outpatient therapists as part of their networks and—more importantly—encourage other providers along the continuum of care to refer patients to rehab therapy before the patient undergoes riskier, more invasive treatment (when that decision is in the patient’s best interest, of course). This represents a huge opportunity for therapists to:

  1. tap into large pools of patients who otherwise might not have sought out physical therapy, and
  2. establish themselves as indispensable members of value-centric care delivery systems.

All of that being said, it’s crucial that therapists and practice owners thoroughly consider the ramifications of joining an ACO before they dive in head-first. If you’re an outpatient practitioner who’s thinking about jumping on the ACO bandwagon, make sure you’ve asked—and answered—all of the questions outlined in this blog post.

Remember, too, that regardless of whether you decide to pursue ACO membership, you cannot avoid the growing financial pressure to provide higher-quality care at a lower cost. While alternative models like ACOs may not be the right fit for your practice, sooner or later (and most likely sooner), the payments you receive for your services will be in some way tied to the value you deliver.

Is your practice part of an ACO or other alternative model? If so, what has been your experience? If not, would you consider participating in one? Share your thoughts in the comment section below.    


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