Medicare to Add Four Dallas-Fort Worth ACOs in 2014

Four Dallas-area healthcare organizations were among the latest group of 123 new Medicare Shared Savings Program accountable care organizations announced this week by U.S. Health and Human Services Secretary Kathleen Sebelius.

The four that plan to launch on Jan. 1 are:

  • Genesis Accountable Physician Group
  • Medical Clinic of North Texas
  • Premier Patient Health Care
  • UT Southwestern Accountable Care Network

ACOs must meet quality standards to ensure that savings are achieved through improving care coordination and providing quality care. The Centers for Medicare and Medicaid Services evaluates ACO quality performance using 33 quality measures.

Medicare Shared Savings Program ACOs accept responsibility for the quality, cost, and care of at least 5,000 Medicare fee-for-service patients. CMS establishes benchmarks based on the anticipated costs of caring for those patients in the absence of an ACO. If costs are below the benchmark, the ACO and CMS share the savings.

Jim Walton, president and chief executive officer of Dallas-based Genesis Physicians Group, said the independent practice association is funding the infrastructure of its ACO. He said the IPA created the GAPN to negotiate ACO contracts, of which the MSSP was the first.

GAPN includes more than 70 primary-care and 160 specialty-care physicians covering about 16,000 Medicare patients. Walton said all but eight of the participating physicians belong to the Genesis IPA. The IPA has about 1,400 physicians. He said future ACO provider growth could come from either inside or outside the IPA.

Walton said GAPN is in discussions with commercial insurers and expects to announce additional contracts over the next two years.

“We anticipate that as we negotiate more commercial and Medicare Advantage contracts, we will be able to grow our ACO [provider] membership significantly,” he said. “Our goal is to create an independent-physician alternative to independent delivery system ACO offerings. Over time, we are going to see a nice competitive [ACO] landscape emerge where ACO models will be more transparent about cost control and quality. That’s what the marketplace wants.”

Plano physician Scott Yates, who is Genesis’ chairman of the board, said the MSSP would not survive unless the organization can grow its ACO contracts. He said the IPA is a good vehicle to test-market contracts.

“If we get a contract based on risk, we’ll take it to the doctors in the IPA and see how many will participate,” he said. “If not enough do, we will know it has too much risk or not enough reward. When we take good care of folks [in the ACO], costs will go down. Costs will follow quality. We’re all in trouble if we can’t fix this [delivery system].”

The MCNT effort will be confined to about 150 physicians within USMD Holdings. Irving-based USMD merged with North Richland Hills-based MCNT in September 2012 to form what it called a “physician-led integrated health system.”

ACO executive Richard Johnston, MD, said the organization would rely on its experience with—and infrastructure from—its Medicare Advantage efforts and patient-centered medical homes to operate the ACO. USMD physicians treat more than 6,000 Medicare Advantage patients and the company is in the process of having its 26 medical homes reaccredited at level 3 by the National Committee for Quality Assurance.

Johnston said there would be “a sea change” in the next three years in the DFW healthcare market. He predicted there would be more Medicare Advantage patients, more commercial sharing-savings programs, and more large employers creating narrower provider networks to control costs.

“The trend is toward more gain sharing or risk sharing,” he said. “This [MSSP] is the way you have to start. It’s a process. You can’t do it overnight. You have to have a lot of things in place to be successful. When the day comes when we have to take on commercial risk, we will be well-situated.”

Anwar Kazi, Premier’s acting chief executive officer, said his company was the only new DFW ACO that was created specifically for the MSSP. Premier has operated ACOs successfully in California and Nevada, and its 15-member North Texas ACO team, which has been together for the past year, includes seasoned ACO executives from California.

The ACO will start with 340 physicians in 137 practices in North Texas and Oklahoma that treat nearly 22,000 Medicare patients. Kazi said Premier recruited the ACO physicians in five months and capped membership for the Jan. 1 launch. Premier’s goal is to have 1000 participating physicians by the end of 2014.

“We went through the good, bad and the ugly with our other ACOs,” Kazi said. “We are blessed with the [management] experience we bring to the table. Our learning curve is smaller [than that of other ACOs]. It takes time to learn the nuances of Medicare ACOs.”

Two major reasons other MSSP ACOs have failed were lack of capital and inability to change physician behavior, Kazi said, both of which he said Premier has successfully addressed.

UT Southwestern Accountable Care Network will include about 1,700 DFW physicians treating about 20,000 Medicare patients.

Danny Irland, chief operating officer of UT Southwestern Health Systems, said the ACO plans to begin with the MSSP and then seek ACO agreements with commercial insurers.

“We are highly focused on driving quality of care and attempting to bend cost curve over time,” he said. “We are not as focused on size. We are developing a population health model to drive quality and efficiency in the market.”

Steve Jacob is editor-at-large of D Healthcare Daily and author of the book Health Care in 2020: Where Uncertain Reform, Bad Habits, Too Few Doctors and Skyrocketing Costs Are Taking Us. He can be reached at