When Massachusetts passed its near-universal healthcare reform law in 2006, the state found itself in the center of the healthcare spotlight. In fact, as the law initially received positive reviews, those who helped craft the legislation were treated as a form of rock stars healthcare versions of Bruce Springsteen, if you will.
But what a difference a few years and a presidential primary make. Massachusetts? effort has become something of a political football; meanwhile, reality has set in as the state deals with healthcare cost control, not something that was truly addressed in 2006.
Now Massachusetts is once again in the spotlight as the state with the second-most Pioneer Accountable Care Organization projects five provider organizations out of 32 nationally. The groups are charged with coordinating care and lowering healthcare costs for a targeted Medicare fee-for-service population. The pilot began Jan. 1, 2012, and will run for three years. Only California, with six Pioneer ACOs, had more than Massachusetts. And there is just a tad bit difference in size there.
Representing Massachusetts are Atrius Health Services, serving beneficiaries in eastern and central Massachusetts; and four others in eastern Massachusetts: Beth Israel Deaconess Physician Organization, Mount Auburn Cambridge Independent Practice Association, Partners Healthcare, and Steward Health Care System. All five systems have strong integrated care capabilities.
In total, the New England region is home to seven Pioneer ACOs, the other two being Eastern Maine Healthcare System and Dartmouth-Hitchcock Medical Center, serving New Hampshire and part of Vermont.
In a lot of respects, it was somewhat of a no-brainer for the Massachusetts groups to apply, and in turn to be selected. All are well suited to take on the challenge, with infrastructure and staff mostly in place. In addition, all five groups are already working under an incentive-based contract with the state's top insurer, Blue Cross Blue Shield of Massachusetts. The Alternative Quality Contract uses global payments covering all services received by a patient, including primary, specialty, and hospital care; outpatient services such as imaging; and prescription drugs. Payments are adjusted for age, sex, and health status and increase annually in line with inflation. The initial payment level is derived from the historical experience of the provider group. A second payment includes substantial performance incentives tied to nationally accepted measures of quality, effectiveness, and patient experience, with more than 30 different measures of success.
Most insurers in Massachusetts have similar deals in play or in the works. And though the Blue Cross Blue Shield contract covers only the HMO commercial population, the structure is somewhat similar to the Pioneer ACO contractual model. During the first two years of the Pioneer ACO model, participants will operate under a shared savings and loss model, meaning they will share either the savings or losses associated with their set of Medicare beneficiaries that participate in the ACO. For the third year, ACOs that meet program requirements will be reimbursed via a population-based payment that pays providers on a per-member, per-month basis instead of a fee-for-service basis.
Of course, none of this guarantees the Pioneer ACO model will be successful. Early data has been positive for the AQC, but there just hasn't been enough time to draw conclusions. Regardless, there should be no surprises in store for the Massachusetts pioneers. After all, they've already experienced the good, the bad, and the ugly of life in the national healthcare spotlight.