Thursday, August 23, 2012

Universal American Bets on Medicare ACOs

By Jill Brown - August 21, 2012
Although the Medicare Shared Savings Program (MSSP) is open only to providers operating in the traditional Medicare fee-for-service program, that hasn’t stopped Medicare Advantage plan operator Universal American Corp. from getting involved.
The insurer, which has a long history of collaborating with provider groups in the MA market, has launched a subsidiary that provides financial and other support to providers participating in the MSSP.
Already, CMS has selected 16 providers partnered with Universal American as ACOs. Those 16 ACOs, which operate in 11 states, include approximately 1,700 participating physicians covering about 150,000 Medicare beneficiaries — about the same number of members as Universal American’s MA book of business. And Kirk Clove, president of Collaborative Health Systems, the Universal American unit that’s setting up these ACO collaborations, says the company is seeking to expand the overall effort further.
Collaborative Health Systems provides back-office support in the form of technical infrastructure, data management tools to identify at-risk members and care management services, as well as legal support and benchmarking data. The firm also provides financial support, so providers “don’t need any capital. We’re confident we can generate savings through the program — so much so that we’re willing to provide the capital up front,” says Clove. Financial arrangements between the groups and Universal American vary, but the MA plan operator always receives some percentage of the savings paid by Medicare, Clove says. He declined to specify what percentage the company receives but notes that “we wouldn’t be doing this if it wasn’t worthwhile.”
But investment analysts are taking a more cautious approach: Deutsche Bank research analyst Scott Fidel notes that Universal American’s move into ACOs is designed to spur growth in the Medicare market, but he adds that “the economic profile of this new venture is not yet clear.”
What do you think? Is there a path to profitability for health plans seeking to support providers in the Medicare ACO program?

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