CMS recently reported early results from their MSSP ACO program. 54 of the 114 initial 2012 start MSSP ACOs (47%) had lower than projected expenditures in their first 12 months. Some media coverage emphasized that "only" or "just" 47% achieved targets and compared the initial investments made by participants to their less- than-exciting early ROIs.

Doctor with female patients

For the reasons given here, it is premature to reflect negatively on these results, and early performance results need to be viewed in context. From an ROI perspective, it is not realistic to expect meaningful returns in one year – the significant investments in long-term system transformation require time to yield results. A look back to the 1990s and the prior wave of risk-based programs shows that many programs were not initially successful. Moreover, ROI may only be achievable at scale, and many of these organizations do not yet have the needed numbers of risk lives or the percentage of their total patient populations being cared for under value-based contracts to yield the desired results.

Many programs were also faced with a number of challenges that contributed to their low probability of success in the first year:

  • The practice and process changes required to transition to value-based care require a significant cultural shift, and the alignment and physician engagement needed to accomplish value-based care does not happen overnight.
  • It is difficult to accomplish system transformation when only a small proportion of an organization’s total patient population is covered under value-based contracts.
  • Several of the new ACOs did not have their complete planned population management programs in place when they started.
  • Some ACOs did not have complete population management IT systems live at inception.
  • The required CMS claims data did not initially flow as needed to populate IT systems. It is difficult to manage a population when you are "flying blind" without the needed data.
  • Some ACOs were initially challenged because they did not understand the difference between managing a Medicare Advantage population, for which they had experience, versus managing the MSSP, an open access program.
  • With only one year of experience, even successful ACOs may not have favorable results due to normal actuarial variance – especially among programs that have low numbers of attributed beneficiaries.

A 12-month performance report does not provide enough time to gauge the success of these ACOs. With time and seeing how they address the challenges from the first year, I look forward to seeing more mature performance results.

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