Opportunity for a Greater Latitude:

Next Generation ACO Aligns Post-Acute Providers


Using Telehealth to Advance Value-Based Care

Expanded participation in advanced APMs drew some positive early reactions from physicians and their advocates despite the uncertain effects. Until now, there doesn’t seem to be a good glide path to get a clear strategy on risk to align post-acute providers.

The CJR Model represents the first of what is likely to be a series of hospital-based bundles. Certainly, CMS is fully aware that the benefits of telehealth are extensive and in a move to increase the use of telemedicine and in turn the cost savings associated.

Historically, Medicare has provided narrow coverage for telehealth services, only interactive audio and video telecommunications. 1 Consumers are not only becoming aware of telemedicine but starting to demand access to it. 2

Ease on telehealth rules for home care, providers will have greater latitude with home visits and skilled nursing facilities under the Next Gen ACO model. To successfully navigate this new risk paradigm, hospitals must understand cross-continuum economics and reconceive their engagement and contracting strategies to include post-acute care providers and the associated risk.


Next Generation ACOs and the Telehealth Waiver

Current Medicare payment regulations have some restrictions on telehealth services for certain rural areas, but they are waived for the 21 organizations that are participating in the Next Generation ACO model in 2016. 3 This waiver overcomes the current constraints on Medicare telehealth reimbursement provided to beneficiaries by removing the limitation of designated, rural originating sites.

The new physician fee schedule provides for extended reimbursements for treatments that are rendered via telehealth. This is a momentous drift. Before, not only were practitioners not reimbursed, but it was even prohibited.

Intended for coverage of monitoring chronic conditions can now be combined as chronic care management and remote patient monitoring with a combined monthly fee of approximately $100. 3 There will also be seven new procedure codes for telehealth services, including annual wellness visits, psychotherapy services, and prolonged services. 3


How to Maximize the Telehealth Waiver?

About 25 percent of all Americans are dealing with multiple chronic conditions like diabetes and congestive heart failure (CHF). 4 Hospitals and providers share the obligation for the total medical expense (TME), 40% of those costs come in the post-acute phase. 4 One key way to lower costs and improve outcomes is to integrate telehealth into a variety of post-acute care settings.

Use Telehealth to Gain more Networks. Next Generation ACO has the ability for participants to reward beneficiaries for seeking care within the ACO’s network of providers. With about 85% of health system leaders are interested in partnering with preferred and local post-acute care providers.5 System leaders knew they needed to outline the list of preferred post-acute providers to improve outcomes and save costs.

One way to create a high performing network is patient engagement. Hospitals fear to violate federal rules that prevent them from limiting patients’ care choices, but they are not prohibited from sharing quality data and other information that could make the choice easier for patients.


Here are four strategies to address readmissions and reduce patient costs:

  1. Using existing EHR’ to pinpoint high-risk patients, hospital staff can phone skilled-nursing facilities to touch base once a patient was discharged.
  2. Making sure that health system staff are all on the same page, preferably before even engaging with the post-acute care provider.
  3. Takes a whole-patient approach to care coordination, addressing the socio-economic, education and social issues that can impact patients through a team-based approach of nurse care coordinators and community health workers
  4. Develops relationships with PCPs and becomes an extension of the provider at the patient level through its care coordinators embedded in the primary care practice, as well as telephonic and home visits.


Use Telehealth to Expand Post-Acute Services. Telehealth can waiver is an opportunity to gain more access which can better interact with patients and nursing home staff that can occur nights and weekends.

Research found that hospital participation in an ACO is not correlated with improved performance in all Medicare VBP programs. 6 It only recognizes the differences in program needs strategies unique to each facility. Knowing that nursing home staff with strong ties to local hospitals are linked with reduced emergency department referrals. Telehealth allows for recognition of key indicators that put the individual at risk for readmission, including medication non-adherence, and provides a means for follow-up communication among multiple care providers. A strong telehealth program increases access even in distant location. Here are some strategies to expand telehealth services:


  1. Use the registry to monitor patients to monitor medication compliance and for a patient visit. Greater use of scarce clinical resources, bridging the gap between clinician supply and patient demand.
  2. Conduct a needs assessment to identify and prioritize potential telehealth activities that will match gaps in services.
  3. Integrating post-acute care providers into hospital care transition and readmission committee structures.


Impact to Population

Next Generation ACO telehealth wavier eliminates both the originating site requirement as well as the rural HPSA requirement and allows an aligned Next Generation ACO beneficiary to receive telehealth services in their home whether they are in a rural area or not. 3

Collaborative relationships among payers drive revenue and lower readmission. Realize that under value-based programs, providers are managing a population under an ACO initiative with approximately 64% of nursing home residents have their care paid for by Medicaid, another 14% are covered by Medicare and 22% have another payer. 7

Next Gen ACOs have the freedom to offer telemedicine to their members for the resolution of minor care needs. When patients have minor concerns, about 90 percent of them don’t need an in-person visit. 8

Capitation is one of the primary alternative payment methodologies being explored in Next Generation ACO to improve the accuracy and completeness of risk adjustment factor data. With about 64 percent of Americans believe that online visits with a doctor should cost less than in-person care, this improves an ACOs ability to predict expenditures and receive accurate reimbursement per member. 9


Building the Bundle

Hospitals historically have had little to do with the post-acute care that follows a patient’s hospital stay. Hospitals are not used to looking at total cost of care over a 90-day period. 10 Careful analysis and scenario building based on historical claims data will ensure that pricing is well on target.

As providers like hospitals and physicians increasingly are rewarded and penalized based on the value of the care they provide. Medicare ACO participants had trouble coordinating care for patients that fell under bundled payment models, causing ACOs to never receive a share of bundled payments. Next Generation ACOs will also be able to provide rewards to beneficiaries that receive care within the ACO. In considering opportunities to increase savings, historical-use data can provide an array of measures.

Sweeping regulations on quality and cost bringing forth change are also problematic. CMS’ also changes to carry out the notifications of any changes to payment and drug modification to skilled nursing facility.11 The stringent rule requires primary responsibility of alerting residents about changes to coverage and treatment.

These signals are a clear and bold step to expand telehealth among patients and, importantly, it allows providers to use telemedicine technology to improve the cost and quality of healthcare delivery.



  1. CMS. Accessed December 23 2016. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/TelehealthSrvcsfctsht.pdf.
  2. ” Survey Reveals Strong Demand For Telehealth Despite Access And Cost Confusion – ATA Main “. 2016. Americantelemed.Org. Accessed December 23 2016. http://www.americantelemed.org/blogs/jessica-washington/2016/10/04/wego-ata-survey-results.
  3. “Next Generation ACO Model | Center For Medicare & Medicaid Innovation”. 2016. Innovation.Cms.Gov. Accessed December 23 2016. https://innovation.cms.gov/initiatives/Next-Generation-ACO-Model/.
  4. InTouch Health. 2016. “Readmissions Archives – Intouch Health”. Intouch Health. Accessed December 23 2016. http://www.intouchhealth.com/blog/tag/readmissions/.
  5. Premier, Inc. 2016. “Healthcare Leaders Eager To Explore Partnerships With Post-Acute Care Providers But May Face Challenges – Premier, Inc.”. Premierinc.Com. Accessed December 23 2016. https://www.premierinc.com/healthcare-leaders-eager-explore-partnerships-post-acute-care-providers-may-face-challenges/.
  6. David Muhlestein, JD, BA Tianna Tu, BS Katelyn de Lisle, and BA and Thomas Merrill. 2016. “Hospital Participation In Acos Associated With Other Value-Based Program Improvement”. American Journal Of Managed Care 22 (July 2016 7). http://www.ajmc.com/journals/issue/2016/2016-vol22-n7/Hospital-Participation-in-ACOs-Associated-With-Other-Value-Based-Program-Improvement.
  7. “Nursing Home Facilities Up In Arms Over New Rules”. 2016. Modern Healthcare. Accessed December 23 2016. http://www.modernhealthcare.com/article/20151016/NEWS/151019928.
  8. “Using Telehealth To Advance Value-Based Care”. 2016. Modern Healthcare. Accessed December 23 2016. http://www.modernhealthcare.com/article/20161116/SPONSORED/161119929.
  9. Well, American. 2016. “American Well® 2015 Telehealth Survey: 64% Of Consumers Would See A Doctor Via Video – American Well”. American Well. Accessed December 23 2016. https://www.americanwell.com/press-release/american-well-2015-telehealth-survey-64-of-consumers-would-see-a-doctor-via-video/.
  10. ” Mandated Bundled Payments Compel Hospitals To Rethink Post-Acute Care | Validcare”. 2015. Validcare.Com. Accessed December 23 2016. http://validcare.com/mandated-bundled-payments-compel-hospitals-to-rethink-post-acute-care/.
  11. “Nursing Home Facilities Up In Arms Over New Rules”. 2016. Modern Healthcare. Accessed December 23 2016. http://www.modernhealthcare.com/article/20151016/NEWS/151019928.

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