Kim Kauffman Outlines Benefits of Medicare Advantage Participation for ACOs

Medicare Advantage (MA) provides accountable care organizations (ACOs) with benefits that aren’t available in Medicare’s ACO program, explained Kim Kauffman, MPH, vice president of value-based care at Summit Medical Group.

Transcript

Why should ACOs be involved in Medicare Advantage? What benefits does it have over the Medicare Shared Savings Program?

I think that Medicare advantage has some levers to control the total cost of care that are just not available in the Medicare Shared Savings Program [MSSP] ACOs. Things like there’s contracted network providers, there are levers that have to do with prior authorizations and or referral patterns that are quite helpful in controlling the total cost of care. Contracted rates is huge—total cost of care is a function of both utilization and contracted rates and so in MA you have more room. The other thing piece I think, particularly from a patient perspective, Medicare Advantage has supplemental benefits that are avaible to the patients that are just not there in traditional Medicare.

There’s some other levers in Medicare Advantage that are not avaible in MSSP and those would have to do with the top line, risk adjustment for example. There’s no top end, there’s no maximum risk adjustment in Medicare Advantage the way there is in Medicare Shared Savings Program. There are, however, 2 downward adjustments and risk adjustment for Medicare Advantage because risk adjustment is outpacing risk adjustment in fee for service.

Also, in terms of cash flow if an organization chooses to partner with a health plan there is much less cash outlay than there is in a Medicare Shared Savings Program, where the provider organization is doing it all on their own. Finally, in shared savings in the Medicare Advantage context you are actually in a position where you can negotiate what is the threshold, what is the upside, what is the downside split. And, certainly, what comes down from the hill in Medicare Shared Savings Program that that is what it is.

Final point I would make though is that while Medicare Advantage has some opportunities to better control total cost of care, not all patients are going to want to be in a Medicare Advantage plan and that’s why I think it’s important that provider organizations have a strategy that includes some element of Medicare Shared Savings Program and MA.