Caravan Health Announces No Fees, Shared Risk ACO Model

Caravan Health, a part of Signify Health, a leader in accountable care and the 340B drug discount program, announces its new success-based pricing model for 2022. ACOs have faced tremendous uncertainties throughout the COVID-19 pandemic, and Caravan Health is supporting providers by eliminating all service fees and start-up costs to join its ACO program. By freeing providers from these costs and allowing them to collect a percentage of shared savings earned, Caravan is positioning providers to better deliver high-value care. Caravan Health works with providers to minimize their downside financial risk in the Medicare Shared Savings Program.

Caravan Health’s success-based pricing model also extends to its 340B service line, where Caravan Health helps ACO participants maximize their use of the 340B drug discount program with new value-based contract data and workflows. The service line can potentially enable ACO participants to earn more 340B discounts while helping hospitals and physicians expand primary care services for underserved patients with minimal risk.

“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 & CEO of Winona Health. “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.” 

Caravan Health’s ACO participants consistently rank among the national leaders in performance measures. In 2019 and 2020, all Caravan Health collaborative ACO participants earned near-perfect Merit-based Incentive Payment System (MIPS) scores, and in 2020, 100% of provider participants in the collaborative ACO model received shared savings. These strong results, combined with Caravan Health ACOs actively managing the care of more than 500,000 Medicare beneficiaries, have led to the company’s management of one of the largest and most successful accountable care organizations in the nation. 

Caravan Health pioneered its collaborative ACO model based on statistical analyses that demonstrated the importance of having a viable number of beneficiaries being managed. Having more beneficiaries in an ACO results in less random variation, creating more stable and predictable financial results – results linked to actual improvements in care rather than the “luck of the draw”. In Caravan Health-supported ACOs, independent providers band together to build a model that positions them to mitigate risk, achieve collective success, and improve patient outcomes. Providers, who would otherwise be too small to make total costs of care risk viable on their own, maintain their independence in a collaborative ACO, while benefiting from safety in numbers. 

“A successful ACO requires joining forces with other health care systems, making investments in systems and staff, and adopting strong population health management. It can be difficult for providers to effectively line the pieces up, especially as the COVID public health emergency continues,” said Caravan Health Chief Executive Officer, Tim Gronniger. “Our model lowers the barrier to ACO participation while providing a sustainable path forward to earn savings and lower total costs.” 

Caravan Health was recently acquired by Signify Health (NYSE: SGFY). The two companies will combine their technology, analytics, and management expertise in value-based payment models to accelerate the transition of the U.S. health care system from fee-for-service to value-based care and create one of the largest networks of at-risk providers. 

For more information about Caravan Health, click here

About Caravan Health 
Caravan Health, part of Signify Health, was founded to develop better solutions for community health systems. We’ve guided more than 300 independent health systems and 26,000 clinicians to achieve meaningful results through value-based care. Our scale, technology, experience, and knowledge provide everything needed to excel in value-based care arrangements, across a range of payers and programs. Since 2014, Caravan-supported ACOs have saved Medicare $510 million. For more information visit http://www.caravanhealth.com.