Becker's Hospital Review

30 CFO / FINANCE ACOs Are Leaving $886M in Net Payments on the Table, Analysis Finds By Emily Rappleye A COs in Track 1 of the Medicare Shared Savings Program are losing out on millions of dollars in addi- tional net payments from CMS by not taking on more risk and missing out on the Quality Payment Program's 5 percent lump sum bo- nus payment for ACOs in Track 2 and 3, ac- cording to an analysis from Avalere. e analysis simulates how much Track 1 ACOs would earn if they were enrolled in Track 2 — based on 2015 performance — and the QPP was in place. Track 1 ACOs do not bear downside financial risk, and therefore share in a smaller portion of savings than their Track 2 and 3 counterparts. However, if these ACOs had taken on more risk in 2015, they would have earned $178 million more in shared savings, according to the analysis. And if the Track 1 ACOs took on downside risk, they would qualify as an Advanced Al- ternative Payment Model under the Medicare Access and CHIP Reauthorization Act's QPP. ese models have the opportunity to earn a bonus up to 5 percent on Medicare Part B expenditures — and based on 2015 perfor- mance, those ACOs would be leaving $1.1 billion in AAPM bonus payments on the table by not bearing the downside risk necessary to qualify, according to the report. "e CMS' new value-based payment in- centives really tip the scales for doctors to assume greater financial risk," Josh Seidman, PhD, senior vice president at Avalere, said in a statement. "For those physicians who were dipping their toes in the water with low-risk ACO models, the incentives now make it ad- vantageous for a majority of them to move more aggressively into greater accountability for population health." Of course, some of the ACOs would have also generated net losses. e analysis indicates some of the ACOs in the simulation would have had to pay back CMS for spending above the benchmark. ese shared losses would have totaled $437 million. Benefits and losses taken together, if all Track 1 ACOs joined Track 2 of the MSSP and performed as well as they did in 2015, they would earn additional net payments of $886 million, according to the analysis. However, the majority of ACOs would still benefit by joining Track 2. Avalere found 79 percent, or 307 of the Track 1 ACOs, would have financially benefitted, compared to 21 percent, or 82, that would not. is year 486 ACOs are participating in Track 1, accounting for most of the MSSP program. Track 2 counts just six participants and Track 3 has 36 ACOs. n MD Anderson Cancer Center Operating in the Black for First Time in More Than a Year By Ayla Ellison T he University of Texas MD Anderson Cancer Center in Houston began operating in the black in August on a year-to-date basis for the first time since January 2016, according to the Houston Chronicle. After reporting a combined $102 million operating loss in September and October 2016 and a $9 million operating loss in November, MD Anderson took major steps to turn- around its finances. In January, the cancer center cut about 1,000 jobs, or 5 percent of its 20,000-person workforce. MD Anderson said the job cuts were expected to save about $120 million a year. In the months since MD Anderson reduced its workforce, it has posted revenues in excess of expenses. As of July 31, the cancer center had an $11 million surplus for the year, accord- ing to the Houston Chronicle. In a recent memo to managers, MD Anderson Senior Vice President and CFO Ben Melson stated, "We've positioned ourselves well for a strong finish to the fiscal year. We can begin fiscal year 2018 in a strong position if we continue the good stewardship and collaboration that has helped guide us through this financial turnaround." n Child's $21M Medical Bill Underscores Medi-Cal Challenges By Ayla Ellison C alifornia Department of Health Care Services Di- rector Jennifer Kent mentioned in social media posts that there is a child in the state whose med- ical expenses totaled $21 million in 2014, according to the Los Angeles Times. Those costs were covered by Medi-Cal, California's Medicaid program, which is run by the Department of Health Care Services. Ms. Kent declined to offer any additional details about the patient, but said patients with the highest costs tend to have severe genetic disorders. "They are very expensive people with really expensive needs," she told the Los Angeles Times. "Your disease de- fines the treatment you require, and the costs are joined to that diagnosis … That's just the nature of the beast." Medi-Cal isn't the only payer challenged to cover the costs of treating these conditions. In 2016, Des Moines, Iowa-based Wellmark Blue Cross and Blue Shield sent let- ters to its customers telling them it was raising premiums for 2017 by about 38 to 43 percent. The insurer said the higher rates were partially due to a single member who receives $1 million of care per month. Earlier this year, Wellmark Executive Vice President Laura Jackson said the high-cost member is a teenage boy who suffers from hemophilia, a genetic disorder that keeps blood from clotting. n

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