In December 2023, the Centers for Medicare & Medicaid Services (CMS) announced an initiative – that started in February 2024, where all Medicare Shared Savings Program (MSSP) and ACO Realizing Equity, Access, and Community Health (REACH) participants would receive shadow bundle data. This move aligns with CMS’s ambitious goal of having every Original Medicare beneficiary in an accountable care relationship by 2030. In this blog, we explore shadow bundles for ACO success and their potential impact on their performance.
Understanding Bundled Payments and Episodes of Care
In CMS’s bundled payment models, an episode of care starts on the hospital admission date or triggering event (for outpatient or multi-setting clinical episodes) and ends 90 days after the triggering event or when the patient dies. The bundle encompasses the total cost of care for that period, including most of the care provided during this time.
The Transforming Episode Accountability Model (TEAM) for hospitals is set to replace the Bundled Payments for Care Improvement Advanced (BPCI-A) and Comprehensive Care for Joint Replacement models. In TEAM, specific bundles are grouped by the condition being treated, such as cardiac, bone/joint, or kidney conditions. The upcoming TEAM model that hospitals must use covers 29 inpatient, three outpatient, and two multi-setting clinical episodes.
Enter the Shadow Bundle
While hospitals prepare for TEAM, ACO REACH, and Medicare Shared Savings Program (MSSP), ACOs are receiving a “Shadow Bundle.” This initiative allows ACOs to review their aligned patients’ locations of care, costs, and outcomes compared with other ACOs nationwide.
Shadow Bundles for ACO Success
The introduction of shadow bundles represents a significant opportunity for ACOs to gain insights into hospital and specialty care within their attributed populations. While the shadow bundle data will not directly impact shared savings or change the ACO attribution methodology, it provides valuable information for optimizing care delivery and cost management. ACOs receive three types of data files:
• Monthly episode-level files
• Quarterly summary reports
• Annual benchmark prices
This data covers the same 29 inpatient, three outpatient, and two multi-setting clinical episodes as the TEAM model, spanning various conditions from cardiac and pulmonary to neurology and infectious diseases. Remarkably, these episodes capture approximately 23% of Medicare Parts A and B expenditures.
Implementing New Strategies – Shadow Bundles for ACO Success
With this wealth of data at their fingertips, ACOs can leverage shadow bundles for ACO Success to:
1. Develop Post-Acute Care (PAC) Strategies
ACOs can identify opportunities to reduce costs and improve outcomes by analyzing PAC utilization patterns. For instance, if an ACO’s PAC utilization is higher than benchmarks, it might focus on better managing care transitions or creating a network of high-performing PAC facilities.
2. Optimize Specialist Referrals
Shadow bundles provide detailed performance data on hospitals and specialists. ACOs can use this information to guide referral decisions, ensuring patients receive high-quality, cost-effective care.
3. Foster Hospital Partnerships
The data can inform decisions about potential partnerships with high-performing hospital systems, aligning goals for patient care and success in alternative payment models.
4. Enhance Payer Negotiations
Shadow bundle data is a valuable asset for ACOs affiliated with hospital systems in contract negotiations with Medicare Advantage and commercial payers. By demonstrating cost-effectiveness across entire episodes of care, including the 90-day post-discharge period, ACOs can strengthen their position for more favorable terms in value-based contracts.
Promoting Specialty Care Integration
Shadow bundles offer a unique opportunity to promote specialty care integration within ACOs:
1. Improved Referral Decisions
ACOs can optimize referral patterns based on patient needs and conditions by comparing average risk-adjusted episodic costs between providers.
2. Strategic Partnerships
The data can guide ACOs in forming partnerships with high-performing hospital systems, fostering shared goals of patient volume growth, coordinated care, and success in alternative payment models.
3. Performance-Based Negotiations
ACOs can use shadow bundle data to demonstrate cost-effectiveness in the acute setting and in the 90 days post-discharge, providing leverage in negotiations with payers.
Challenges of Shadow Bundles for ACO Success
While shadow bundles offer immense potential, it’s essential to approach them with a critical eye:
1. Limited Scope – Shadow bundles capture only about 23% of Medicare spending, potentially missing important aspects of specialist performance.
2. Outpatient Blind Spots – Many procedures now performed in outpatient settings or ambulatory surgical centers may not be fully captured.
3. Pre-Episode Care – The 90-day post-event window doesn’t account for care provided before the triggering event, which can be crucial for chronic condition management.
Looking Ahead
As we move towards CMS’s goal of implementing a mandatory bundled payment model in 2026, shadow bundles serve as a valuable testing ground. ACOs that master the use of this data now will be well-positioned for success in future payment models.
Moreover, integrating shadow bundle insights with existing ACO strategies opens doors to more comprehensive approaches to care delivery. By combining episode-based insights with total cost of care management, ACOs can engage a broader spectrum of providers and tailor interventions more precisely to patient needs.
The Bottom Line
Shadow bundles represent a significant leap forward in the journey towards value-based care. By embracing this data source, ACOs can:
• Better understand and manage specialty care costs
• Improve care coordination across the entire episode of care
• Engage specialists more effectively in value-based care initiatives
• Prepare for future mandatory bundled payment models
Persivia CareSpace® stands at the forefront of supporting ACOs in leveraging shadow bundles effectively. With its advanced data integration and analytics capabilities, CareSpace® enables ACOs to process and analyze shadow bundle data precisely. Persivia’s deep understanding of specialty care programs and extensive experience in episodic models help position ACOs for success in the new landscape. CareSpace®’s robust benchmarking capabilities allow for comprehensive performance comparisons across all shadow bundle episodes. By harnessing Persivia’s expertise and technology, ACOs can perform under the shadow bundles, optimize their performance, and drive meaningful improvements in care delivery and cost management.
Conclusion
Shadow bundles are not just a new data point but a strategic imperative for ACOs. By harnessing this powerful tool, organizations can drive targeted improvements in specialty care, optimize referral patterns, and enhance overall performance. The insights gained from shadow bundles will be crucial in shaping future success under value-based care models. ACOs that act now to integrate this data into their decision-making processes will gain a significant competitive advantage. With the right technology partner, like Persivia CareSpace®, ACOs can transform shadow bundle data into tangible improvements in care quality and cost management. The time to embrace shadow bundles is now—the future of value-based care depends on it.
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