How can I prove my value to an accountable care organization?

Filed under Key Questions
Originally published in Market Research Letter: September/October 2012

Q: How can I prove my value to an accountable care organization?

A: Accountable care organizations (ACOs) are concerned about costs and outcomes. Since providers of services to ACO patients are paid at prevailing Medicare rates, ACOs will be profitable by eliminating unnecessary services, substituting lower-cost alternatives, or ensuring that providers deliver care in the most effective manner.

It is in this realm that agencies will find they are competing against other agencies in their area. Assuming your Home Health Compare scores are comparable, your agency can differentiate itself from competitors across three key metrics — recert rate, average reimbursement per episode, and average case weight.

Healthcare Market Resources’ Home Health Market Share Report provides a recert rate competitive comparison, while the Home Health Financial Analysis report highlights the average reimbursement per episode and average case weight. If your agency is in the upper percentiles for these metrics, you will be able to make a strong case for your preferred provider status with the ACO.

Other home care organizations could contest this assessment, however, by contending differences in diagnosis mix, which can impact these metrics. If that happens, you can use our Home Health Key Indicators by Diagnosis report to settle the issue. This report details recert rate, average reimbursement per episode, and average case weight by the following primary diagnostic groups: cancer, diabetes/endocrine/metabolic, blood, mental health, nervous system, cardiac, digestive, pulmonary, injury/fracture, skin/musculoskeletal, and other.

By comparing groups of homogenous patients with similar primary diagnoses, the argument regarding differences in patient mix impacting these metrics is negated. The report also gives volume statistics for each diagnostic group, so the user can focus on those diseases with the largest volumes.

As post-acute care becomes more accountable through healthcare reform, providers will increasingly find they have to quantitatively prove their competitive superiority.