Cleveland Clinic’s Medicare Accountable Care Organization (ACO) Transitions to New Advanced Payment Model

Cleveland Clinic’s Medicare Accountable Care Organization (ACO) has transitioned to a new payment model introduced this year by the Centers for Medicare & Medicaid Services that can reduce healthcare costs by increasing the health system’s opportunities for performance-based savings.

Under the new model, Cleveland Clinic Medicare ACO, which manages a population of 105,000 beneficiaries, will assume limited performance-based downside risk if it doesn’t meet a savings threshold, in addition to the opportunity to share in savings based on its quality performance.

With the downside risk of a fixed 30 percent loss sharing rate comes the potential for rewards in terms of shared savings (up to 50 percent). The new model, called Track 1+, qualifies Cleveland Clinic Medicare ACO as an Advanced Payment Model under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), allowing all its participating providers to meet MACRA’s quality reporting requirements and provide the health system with greater Medicare reimbursement for physician services starting in 2019.

“Our participation in the Medicare ACO shared savings program has been an important step in bringing together all of our providers to improve the quality and reducing the total cost of the care we deliver,” said James Gutierrez, M.D., president and medical director of Cleveland Clinic Medicare ACO. “Our results show improvement in ACO quality metrics and millions of dollars in shared savings, and have made us confident we can assume more accountability and risk for the total cost of care for our Medicare patient population.”

Through Cleveland Clinic Community Health, a new population management-focused initiative, Cleveland Clinic is well positioned to manage its Medicare population efficiently and holistically and, by leveraging more robust analytics on beneficiaries, can assume greater risk.

Under Track 1+, Cleveland Clinic Medicare ACO will have prospective beneficiary assignment that allows it to know in advance the patient population for which it is responsible, and the option to request a Skilled Nursing Facility 3-Day Rule Waiver to provide greater flexibility to better coordinate and deliver high quality care.

In 2016, the ACO had $42.2 million in savings, which was a 24.5 percent increase from 2015. Also in 2016, it received $19.9 million back in shared savings, a 19.8 percent increase over 2015, and the health system’s quality score was 96.3 percent.