Dartmouth-Hitchcock defers joining Next Generation ACO program over financial targets

Dartmouth-Hitchcock Medical Center was surprisingly not among the list of 21 health systems joining the Next Generation Accountable Care Organization model released by the Centers for Medicare and Medicaid Services on Monday.

Surprising because in late fall, Dartmouth-Hitchcock indicated it would leave Pioneer in favor of Next Generation.

Dartmouth-Hitchcock has deferred its decision on Next Generation until 2017 because of the financial targets set by CMS, according to Dr. Robert Greene, executive vice president and chief population health management officer for the New Hampshire health system.

"They will give us a chance next fall, they'll give us new numbers as far as a financial target," Greene said.

[Also: Brown & Toland leaves Pioneer but declines to join Next Generation]

That's when the hospital will make a decision on joining Next Generation. Had it joined this year, Dartmouth-Hitchcock risked losing money again, he said.

Under Pioneer, Dartmouth-Hitchcock Medical Center had losses for two years in a row, while having good quality scores. The hospital owed CMS an estimated $3.7 million for those two years.

"When we looked at the proposed benchmark target," Greene said, "we'd be at risk for a significant loss again."

CMS begins with a 3 percent discount, giving back a percent based on quality, he explained.

"There's some built-in savings for CMS," said Greene, "When we plug that number into what they gave us, we looked to be at risk for a multi- million dollar loss next year."

Another advantage to waiting is that next year, Next Generation will be in its second year and CMS will gain experience based on feedback.

[Also: Next Generation launches with 21 accountable care organizations]

"The first year in any new program there's going to be some experience gained," Greene said. "It's not just single financial number, but the overall contract is going to need significant clarifications."

Next Generation consists of three initial performance years and two optional one-year extensions.

Internally, the hospital is well-positioned on new model edicts such as telehealth, according to Greene. For 2016, Dartmouth-Hitchcock is part of neither ACO, but the health system continues to follow the model, he said.

"Irrespective of the ACO program," he said, "we're still taking a population health management approach, improving care for the highest needs patients."

Twitter: @SusanJMorse