Accountable Care Organizations in the Wake of COVID-19

Lynn Barr of Caravan Health, sheds light on how COVID-19 has impacted accountable care organizations, as well as offers her thoughts on the potential long-term effects on the health care system.

Please introduce yourself and your background.

Thank you. My name is Lynn Barr, and I’m the founder and executive chair of Caravan Health. I’ve got a master’s in public health. I started Caravan in 2014 to try and help rural communities participate in accountable care organizations (ACOs) and today, we are the largest aggregator of ACOs in the country.

The National Association of ACOs recently published a report highlighting several concerns that have been raised due to COVID 19. How has the pandemic affected your organization?

It’s had a very dramatic effect. Under a national emergency like this, the idea that we should be sitting there talking about annual wellness visits or bring in your patients for annual wellness visits when you could potentially expose them to a disease is kind of crazy.

How do we change what we’ve done? What we’ve been told by our clients is that population health has really helped us to be prepared for what’s happening. We’ve already shifted from a reactive health care system to a proactive health care system. Having the ability to use all this virtual technology, telehealth, remote patient monitoring, chronic care management—these are all programs we already had in place and now can expand greatly thanks to these opportunities under Medicare. 

As a company, our focus right now is maintaining the viability of our health care systems is number one, just helping them survive. Their volumes are down 50%. Patients aren’t coming in.

Sick patients are not getting care or not seeking care, so we’re reorienting them to be proactive with our chronically ill. In many ways just trying to help them do as much as they can for their patients remotely and then bill for it, so that they can survive financially—a completely different focus from where we were in February.

How do we prevent that second wave, that second wave of death, disability, and illness that’s caused by really the whole health care system, patients not accessing health care in the way they should?

Can you comment on many ACOs’ current concerns and what can be done to prepare, if anything, or make up for COVID’s negative impact?

First of all, is COVID going to be negative or positive in terms of health care spend? I think the actuaries were all saying, “Oh, costs are going up,” but I don’t think that’s actually going to happen. I think 2020 will be a historically low year for total health care spend because the consumers are not wanting to get health care. Nothing we can do is going to change that until they feel safe. The last place they’re going to feel safe is in health care facilities. 

MedPAC issued a comment letter that basically said that this is crazy random situation, what’s happening here. It’s very much happening community by community, and we see that as well, that all communities are being affected differently. The effect on their volumes is significantly different. CMS should not use 2020 data to calculate shared savings payments, and they should not use 2020 data to calculate benchmarks for 2021. I think that’s a fascinating comment, and I think it’s absolutely right.

If we just moved forward and pretend that a catastrophe didn’t happen, some people get checks, some people won’t, it will be completely random. It will have no reflection of how hard a system worked to constrain costs or improve quality, because that’s not really what everybody’s focusing on right now. You improve quality, that means I have to bring patients in for mammograms. They don’t want to come.

What MedPAC is saying is that it is a do over year. What NAACOs is saying: don’t let anybody pay penalties, but it’s okay to give people payments whether they deserve them or not. We come in somewhere in the middle of that and say it costs a lot of money for people to be in ACOs, in order to comply with the program.

It takes a lot of effort and we have spent the last 10 years building this program. We’re going to start from scratch. What can the government do to stabilize the program, because it is a permanent part of Medicare. They can’t just say, “You know what? We’re going to stop doing this.”

What we’re thinking about is how should the government deal with the Medicare Shared Savings Program for the next one to two years? This is a great opportunity for the government to figure out how their program works in unusual situations.

It’s important that we keep getting data. Is this regional rebasing really working vs national? How does this work in a pandemic situation where you have a lot of local variability based on when and where the virus hit your community? How does all that work against a national benchmark? How does New York impact everyone else’s numbers?

What we’re proposing the government do is say, last year in 2018, the government saved I think it was $1.7 billion. They made shared savings payments out of that, net of shared savings payments they still made about a billion dollars. Why don’t we just take the savings we made in 2018 or 2019, we haven’t seen those numbers yet, but I know for us it was a banner year.

We saved more than $130 million. Why don’t we just take those numbers, create an national average savings for Medicare, and pay the providers half of that, or based on their quality score times their quality score, so that every provider would get paid something, as long as they report quality and they meet minimum standards.

It keeps everybody in the program so that it offsets their costs, keeps them going till the end so that we can reorient. If the government wanted to, they could say we could ratchet that savings up. If you get 15% of your patients in chronic care management, national average right now is 3% or 4%. We’ve got to get virtual care going.

I think there’s ways the government could use this program to improve care under COVID and to keep the providers whole, to keep them moving forward, not lose the momentum, but I’m not in favor of the idea of we’ll take the upside, forget the downside, because it’s a completely random event which is MedPAC’s point.

The government needs to recognize it, say whatever program you’re in right now, you can just stay in there for the next one to two years till we figure this out. We’ll pay you national average savings to be in the program and continue to participate, as long as you meet the needs of your community.