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As the first ACO focused solely on residents of long-term care facilities, LTC ACO and its participating providers can engage in the savings that accrue to the Medicare program that result from their efforts to reduce preventable hospital and emergency room admissions for the long-stay residents in many of its facilities. Studies show that hospital expenses account for nearly 40% of Medicare spending on patients who live in long-term care facilities¹ and that a significant portion (30-67%)² of those hospital admissions are avoidable.
In 2014³,there were 15,600 nursing homes with 1.4 million residents and occupancy rate of 82.4%. According to the most recent Medicare Current Beneficiary Survey, 2013 Characteristics and Perceptions of the Medicare Population, residents in long-term care facilities had Medicare benefit payments of over $40.3 billion. But Medicare does NOT cover the cost of long-term stays in a nursing home, such as room and board. Those costs are typically covered by Medicaid or are paid privately by individuals. As a result, long-term care facilities have historically had limited opportunities to participate in Medicare program savings for its long-stay residents, despite long-term care facility residents costing the Medicare program twice the average of other Medicare beneficiaries.⁴
LTC ACO has a proven track record of helping LTC providers achieve financial success and improve clinical impact. In fact, for performance year 2021, LTC ACO earned shared savings of $20.6 million, at the maximum Enhanced Track sharing rate of 75% of gross savings. The organization achieved the highest shared savings distribution per beneficiary for 2021 at $2,574.
Participation in LTC ACO creates an effective opportunity for long-term care facilities to be financially rewarded for improving the quality and cost of care delivered to their Medicare fee-for-service, long-term care residents, even when such care is provided outside of the facility! LTC ACO participating long-term care facilities have access to comprehensive Medicare claims data for ACO-assigned beneficiaries and are therefore able to understand and address the Medicare needs for their long-stay residents in a way they previously couldn’t.