Walgreens made big news two years ago when it partnered with large physician groups in New Jersey, Texas, and Florida to form accountable care organizations (ACOs) to participate in the Medicare Shared Savings Program (MSSP). The concept was for Walgreens’ pharmacists to be integrated into the patients’ care team to facilitate medication therapy management, as well as administer immunizations and provide health testing.
The pharmacy giant is in the news again, this time for terminating its relationship with two of the three ACOs including the Advocare Walgreens Well Network, which was formed with New Jersey physicians, and the Scott & White Healthcare Walgreens Well Network in Texas. Walgreens will continue to work with one ACO, the Diagnostic Clinic Walgreens Well Network in Florida.
In the first performance year, the Advocare ACO exceeded its benchmark by $6 million. The Scott and White ACO largely held spending in line with its target, while the Florida ACO saved Medicare over $1.5 million. All three ACOs met the MSSP quality performance standards.
According to Modern Healthcare, Walgreens spokesman Jim Cohn said the company found the MSSP “less conducive" to efforts that include medication therapy management and analysis because “providers feel restricted to only provide services where Medicare will directly reimburse.”
In other words, the ACOs’ physicians were unwilling to participate in care management because there is no reimbursement for that work. They viewed their time as better spent providing services that generate immediate revenue. Despite the fact care management is proven effective in reducing total costs of care, providers prefer the bird in hand (fee-for-service reimbursement) to the two in the bush (potential revenue from shared savings).
But what if the birds could be lured out of the bushes with seed money? What if physicians were reimbursed for care management services? Starting January 1, Medicare now reimburses physicians approximately $40 per month for chronic care management (CCM) services. As detailed in PYA’s chronic care management (CCM) white paper, this payment is based on 20 minutes of non-face-to-face care management services furnished to qualifying beneficiaries by licensed clinical staff in a practice that meets specific regulatory requirements.
For an ACO, CCM reimbursement can serve as an up-front capital investment in new care processes to improve quality and enhance efficiency. By supporting its participants in developing and deploying CCM programs within its practices, an ACO can provide immediate return on investment in the form of new revenue. Physicians will be incentivized to do the work now that results in long-term success.
An ACO’s support for CCM programs may involve educating participants on the reimbursement rules, providing sample documents, identifying eligible beneficiaries, vetting technology solutions, or even furnishing centralized non-face-to-face care management services. An ACO can custom-design its offering to the needs and wants of its participants.
Many have characterized the MSSP’s first-year results as underwhelming, with most ACOs not eligible to receive shared savings. There are several possible explanations, but Walgreens’ decision to discontinue its participation in two of its three ACOs highlights how challenging it is to change physician behaviors. That challenge becomes more manageable, however, with the opportunity for CCM reimbursement.