Participation in ACO can keep SNFs ‘in the game’


While responsible care organizations (CAOs) have never been particularly popular among skilled nursing facilities, now may be the time to take more risks to stay competitive in the market.

COA involvement can help operators maintain referrals when so many potential residents are diverted to home health care, hospices, and other pathways along the continuum of care.

The industry’s shift towards value-based care also makes it more imperative to strengthen relationships with physicians; physicians are at the heart of ACO membership, along with hospital systems and other healthcare providers to care for fee-for-service Medicare beneficiaries and in turn reduce medical errors and services two fold.

“It’s more of a macro or market-oriented view of things. By not doing this you run the risk of turning back the clock, you don’t run the risk of standing still, ”said Jason Feuerman, senior vice president of strategic development and managed care at Genesis HealthCare. “It keeps you in the game, but it doesn’t mean you’re going to run faster. “

Feuerman is also president of LTC ACO, a wholly owned subsidiary of Genesis serving approximately 900 nursing homes across the country. ACO’s reach is also increasing, from 13,000 lives in its care to 25,000 expected by 2022. About 90% of LTC ACO’s growth comes from physician groups, Feuerman added.


ACOs have always been a contentious payment model in the skilled nursing industry since its introduction under the Affordable Care Act of 2010.

Numerous studies have shown that ACOs generate savings by reducing the length of stay in a retirement home; other ACO programs have completely eliminated SNFs as participants.

“The way the typical ACO makes money, or can make money, is to reduce the use of SNF. When you think of a typical SNF and the cost structure, one person goes to the hospital, many people who leave a hospital and get Medicare end up going to an SNF, ”said Feuerman. “The idea for an ACO is to either get them to skip the SNF, or tell them to get them into an SNF, get them out of there as quickly as possible.”

If a local hospital has its own ACO, Feuerman said, operators “have no choice but to participate” in the model, while stressing that SNFs would do well to strengthen or at least review their relationship with the group of doctors, and in turn referral sources, with a new perspective.

“There are huge benefits to physician groups, that’s where the assignment or membership really comes from, which serve patients in long-term care facilities,” Feuerman explained. “The way we turn it around is to tell SNF, this is one way for you to attract physicians to your facility to participate.”

Although an SNF operator has the capacity to form their own ACO, they must already build up a significant amount of resources to be successful. said Feuerman.

As a perspective, the Genesis Physician Group entity existed for 12 to 14 years before it matured enough to participate in the MSSP ACO program.

Evolution of ACO

Considered a next-generation ACO, the Medicare Shared Savings Program (MSSP) ACO model grew rapidly to peak in 2018 before leveling off in subsequent years. The Medicare Payment Advisory Commission (MedPac) believes this stabilization is due to the Centers for Medicare & Medicaid Services (CMS) preventing new ACOSs from entering the MSSP model during the pandemic.

Interestingly, the number of beneficiaries per ACO continues to increase despite the cap on the number of ACOs available, a trend that is reflected in the LTC ACO figures.

ACO MSSPs represent 19% of Medicare beneficiaries according to January CMS enrollment data, with managed Medicare taking up most of the pie at 47% and traditional fee-for-service at 31%; other ACOs and ACO-type models represent 3% of Medicare beneficiaries.

MedPAC released its 2021 data book on healthcare spending and the Medicare program in mid-July.

CMS requires MSSP ACOs to take more risk by eliminating safe lanes or lanes and measuring spending levels at the regional level as a performance indicator.

As a result, fewer ACOs were added and existing programs were closed.

“There has been a dramatic and fairly consistent decline in ACO attendance since then,” added David Pittman, senior policy advisor for the National Association of ACOs (NAACOS).

The Trump administration in 2018 cut rates to 40% for ACOs while asking them to take more risk sooner, according to reports. According to data collected by NAACOS, newly formed ACOs were reduced by more than half after these changes took effect, from 124 ACOs formed in 2018 to 41 formed in 2019 and 35 in 2021.

Legislation favorable to ACO

The federal government appears to be turning to alternative payment models such as ACOs, with bipartisan legislation introduced in late July to strengthen Medicare’s value-based care models by extending a 5% incentive payment for six years to providers.

The 2021 Health Care Value Act has recovered costs by up to 50-60%, up from 40% in 2018, while giving newly-trained ACOs three years before they have to take more of risks.

“[CMS] found that people weren’t moving towards risk fast enough, and therefore results weren’t being generated, ”Feuerman added of past changes.

These conditions are a huge boon for potential ACOs, according to NAACOS, which has conducted studies showing that the model is most effective when it has had several years to develop before taking on more risks.

“We have encouraged the new administration and Congress to reassess the balance between risk and reward… It takes a few years for a new ACO to start generating savings,” Pittman said. “[CMS] needs to give new CCOs time to understand the data coming in on their patients, to build relationships with providers to effectively manage their long-term care. After some years, [an ACO] should generate savings.

The organization’s arrival three years before the risk was based on data gathered since the model was created and implemented, Pittman said.


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