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The American Journal of Accountable Care December 2015
The Need to Level the Playing Field Between Accountable Care Organizations and Medicare Advantage
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A. Mark Fendrick, MD Co-Editor-in-Chief, The American Journal of Managed Care Professor of Medicine, School of Medicine Professor of Health Management and Policy, School of Public Health Director, Cen
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Revisiting the Role of Academic Medical Centers in Medicare Shared Savings Program ACOs
Benjamin M. Gerber, JD
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Leif I. Solberg, MD; Stephen E. Asche, MA; John C. Butler, MD; David Carrell, PhD; Christine K. Norton, MA; Jeffrey G. Jarvik, MD, MPH; Rebecca Smith-Bindman, MD; Juliana O. Tillema, MPA; Robin R. Whi
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Revisiting the Role of Academic Medical Centers in Medicare Shared Savings Program ACOs

Benjamin M. Gerber, JD
Academic medical centers should strongly consider partnering with community hospitals and independent primary care physicians to achieve success in the Medicare Shared Savings Program.
Since the introduction of accountable care organizations (ACOs), many have questioned the viability of academic medical center (AMC) participation in the Medicare Shared Savings Program (MSSP). According to a 2011 perspective piece in the New England Journal of Medicine, “ACOs at academic medical centers will be challenging,” and “several leaders…doubt that ACOs can readily be established at academic medical centers.”1 Albeit the minority, several notable AMCs have formed or participated in MSSP ACOs since that time. Although not all academic ACOs have yet met with success, the University of Michigan (“Michigan”), Hackensack University Medical Center (“Hackensack”), and Thomas Jefferson University Hospitals (“Jefferson”) earned significant shared savings in the most recent MSSP performance year. As Michigan, Hackensack, and Jefferson exemplify, AMCs should not be afraid of participating in the MSSP and should consider partnering with community hospitals and independent primary care physicians through an ACO.

Challenges for AMCs
The Affordable Care Act created the MSSP “to facilitate coordination and cooperation among providers to improve the quality of care for Medicare fee-for-service (FFS) beneficiaries and reduce unnecessary costs.”2 Under the MSSP, CMS assigns a Medicare FFS beneficiary to an ACO if the beneficiary receives a plurality of primary care services from primary care physicians participating in the ACO. Under the 1-sided model—which presents no downside risk—ACOs that meet the MSSP’s quality, savings, and eligibility requirements will earn a payment of up to half of the savings it achieves for Medicare for its assigned beneficiaries. An ACO must meet or exceed a minimum savings rate to earn a shared savings payment.3

Recognizing the critical role of AMCs in the MSSP, CMS excluded Indirect Medical Education and Disproportionate Share Hospital payments from ACO cost determinations to prevent “incentives for ACOs to avoid appropriate referrals to teaching hospitals in an effort to demonstrate savings.” As CMS explained, “Removing the disincentive for ACOs to refer patients to teaching hospitals will help ensure beneficiaries continue to be referred to the most appropriate place of service for their care.”4

Nevertheless, AMCs must overcome a variety of additional obstacles to achieve success in the MSSP: autonomous academic departments that lack true clinical integration, tenure systems based on publication and scholarly reputation more so than quality of care, and incentives that align more closely with research than delivery of clinical services.5 Such challenges only magnify the inherent difficulty that all providers face in any value-based reimbursement arrangement: “aligning the incentives of the entire organization when going from a volume-based model to a model that has more to do with the longer-term provision of healthcare to members of a population.”6

Despite these difficulties, a number of AMCs have established or participated in MSSP ACOs, including Hackensack (2013), Johns Hopkins (2013), University of Virginia (“Virginia”) (2013), Indiana University Health (“Indiana”) (2013), University of California, Los Angeles (“UCLA”) (2013), University of Michigan (2014), Jefferson (2014), and Cleveland Clinic (2015). Each of these academic ACOs elected to participate in the 1-sided MSSP model.

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