Caravan Health, part of Signify Health, is eliminating service fees and startup costs to join its accountable care organization building program, it announced last week.
The effort is part of what it calls a new “success-based” pricing model for 2022. By eliminating these costs, which can be prohibitive, Caravan Health hopes providers can provide better care and capture a portion of shared savings earned, company executives said in a press release. The company works with providers to minimize their downside financial risk in programs like Medicare Shared Savings.
This pricing model will also apply to the company’s 340B service line, where ACO participants have the potential to earn more 340B drug discounts and expand primary care to underserved populations.
“As Medicare and other payors are asking health care providers to take financial risk related to patient outcomes, it is critical that accountable care enablers not only provide the guidance, technology and methodologies necessary for success, but also walk the walk, in terms of sharing financial risk,” said Rachelle Schultz, president and CEO of Winona Health, in a press release. “Caravan Health is that enabling partner. Their success-based pricing and shared risk model ensure they're invested in our organization's success. That is the type of confidence and assurance we need.”
In 2019 and 2020, all Caravan Health collaborative ACO participants earned near-perfect merit-based incentive payment system scores, according to the company. In 2020, all provider participants also received shared savings.
“A successful ACO requires joining forces with other health care systems, making investments in systems and staff, and adopting strong population health management,” Caravan Health CEO Tim Gronniger said in a press release. “It can be difficult for providers to effectively line the pieces up, especially as the COVID public health emergency continues. Our model lowers the barrier to ACO participation while providing a sustainable path forward to earn savings and lower total costs.”
Signify Health’s acquisition of Caravan Health earlier this year created a network of healthcare professionals expected to reach 2 million homes in 2022. Upon the acquisition, Gronniger's role expanded to also encompass executive vice president of accountable care at Signify Health. Payers have long been asking Signify Health to expand risk contracts to providers, CEO Kyle Armbrester told Fierce Healthcare in February.