Multiple EHRs, lack of interoperability hamper Next Generation ACOs

Next Generation ACOs have shown promise to reduce spending without limiting quality, but significant health IT challenges may curtail their potential.

The new ACO models did well in their first performance year, according to a new evaluation report from the Centers for Medicare and Medicaid Services. However, the agency’s research cited access to data outside their organization or network, interoperability among providers in the network, as well as the cost of health IT as “extremely challenging” for the NGACOs.

Initiated in 2016, the purpose of the agency’s NGACO model is to test whether strong financial incentives for ACOs coupled with tools to support better patient engagement and care management, can improve health outcomes and reduce expenditures for Medicare fee-for-service beneficiaries.

According to CMS, the 2016 cohort of NGACOs achieved model-wide reductions in spending by about $100 million in their first performance year—a 1.7 percent decline—or $62 million after adjusting for shared savings and loss payments, a 1.1 percent net savings. However, more than half of the model’s cost and utilization decline was generated by four of the eighteen NGACOs. Still, “consistent with prior ACO work, this savings appeared to be largely associated with reductions in hospital and SNF associated costs.”

At the same time, about half of the 2016 NGACOs indicated in a survey that nine different electronic health records were in use within the NGACO, while semi-structured telephone interviews suggested that, in some cases, even more EHRs are in use among their providers.

“Many NGACOs explained that having multiple EHRs and lack of interoperability within their NGACO network prevent effective information exchange for care coordination, quality improvement and performance improvement,” states the report.

In addition, CMS found that consolidating and integrating data across multiple EHR platforms is a challenge for many NGACOs in the survey, as is building data analytics capacity with several describing a “slow ramp-up period or learning curve that required investments of time and resources.”

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Several NGACOs noted that their providers’ EHR capabilities were also an issue, according to the agency. “For example, while their EHR systems could produce registries, they could not distinguish levels of risk, identify high-cost patients, produce real-time reminders or track patients across a continuum.”

Although the ACOs in the NGACO model take on greater performance risk than those in current models, they also potentially share in a greater portion of savings. NGACOs assume 80-100 percent two-sided risk, choose from several payment mechanisms designed to facilitate cash flow, and may select optional benefit enhancements that provide more flexibility in patient care delivery—including around the provision of telehealth.

“These results provide further evidence that ACOs succeed under two-sided risk,” said CMS Administrator Seema Verma in a written statement coinciding with the release of the report.

Nonetheless, while the agency said the early results from the 2016 cohort of NGACOs are promising, results in the second performance year will indicate “whether this trend continues for these ACOs and is replicated in subsequent NGACO cohorts.”

The NGACO model, which began in January 2016 with an initial cohort of 18 participants, took on two additional cohorts starting in 2017 and 2018 and is slated to run for a five-year period ending on Dec. 31, 2020.

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