Message from Jeffrey Frazier, MD

Chair, Finance & Contracting Committee,

Board of Managers

Interrogatives - who, how, what, when, where and why - I can’t help but wonder how many of those were asked and in what order when the MSSP final results for 2017 were announced and we found out that our Alliance achieved shared savings of nearly $12,000,000. Though our past performance certainly showed we were on the right track towards achieving shared savings, having come so close in the prior two years, I’m not sure any of us saw that level of savings on the horizon.

While other committees such as the Quality committee can ponder the “how” we achieved it, and committees such as Membership and Operations can determine the “who” gets the distribution, your Finance and Contracting committee is charged with determining the “what” we do with the savings.

In that CMS keeps 50% of the savings [hence “shared savings”] our 50%, less a small deduction for our quality score, left just over $5,000,000 in distribution to the Alliance. Simplifying the process for allocating the savings, we considered three “buckets” for the savings: Mary Washington Healthcare, physician performance distribution, and sustainability.

It’s been our precedent, MWHC receives 50% of the savings for assuming risk in our performance based programs. Though that may seem like a lot, keep in mind that 100% of any potential losses go to MWHC since they assumed all the risks associated not only with the MSSP program, but also with the BPCI program and the NextGen program, which we started January 1st, 2018.

That leaves 50%, or $2.5 million, to be divided between performance distribution and maintaining sustainability of the Alliance. The Finance and Contracting Committee is considering $1,500,000 for performance distribution, which represents 30% of the achieved shared savings. That 30% distribution in the form of physician performance bonuses is roughly 50% more than most MSSPs distributed to their physicians in recognition of their performance. The distribution method for MSSPs is reported to CMS, is public information, and most distribute around 20% to their providers.

The remaining balance of approximately $1,000,000 will stay in the Alliance for sustainability. The programs we have put in place to achieve the savings and maintain high quality standards all come at a cost. When compared to other ACOs, our membership dues are below average. Also, unlike other ACOs, the Alliance does not take any percentage of the increased rates we have achieved through our contracting efforts. As such, in order to maintain the sustainability of the Alliance, these programs need to be funded somehow.

We are pleased to be able to potentially distribute such a high percentage of the savings in recognition of the work the Alliance providers have done not only achieve the shared savings, but also to provide incredible quality for the patients we are privileged to care for.