Skylight Health Acquires ACO Partners and Enters Value-Based Contracting for Traditional Medicare Patients
14 July 2021 - 9:00PM
Skylight Health Group Inc. (NASDAQ: SLHG; TSXV:SLHG) (“Skylight
Health” or the “Company”), a multi-state primary care group in the
United States, today announced the acquisition of ACO Partners LLC
(“AP”), a new Accountable Care Organization (“ACO”) that will begin
participation in the Medicare Shared Savings Program (“MSSP”)
offered by the Centers for Medicare and Medicaid Services (“CMS”)
effective January 1, 2022.
- An Accountable Care Organization (“ACO”) is a healthcare
organization that ties provider reimbursements to quality metrics
and reductions in the cost of care.
- An ACO will share in the savings it achieves for the Medicare
program through its MSSP participation for fee-for-service
beneficiaries, and direct contracting program with CMS;
- Under the Medicare Shared Savings Program, the organization can
see annual shared savings from 40% (single-sided risk) up to 75%
(full risk) on any attributed Medicare beneficiaries;
- Skylight’s ACO will enable it to begin value-based care
directly with CMS under a single-sided risk agreement in Year 1
with a goal of shifting to full risk;
- This Acquisition expands potential for National payor
contracting including Medicare Advantage;
- In addition to Skylight participants of the ACO, Skylight
expects to solicit new provider networks for participation in the
Skylight ACO; and
- Skylight expects to see the ACO benefit all current and future
Skylight primary care practices for traditional Medicare patients
at the start of the 2022 contribution year.
“We are very excited for this foundational step at Skylight,”
said Prad Sekar, CEO at Skylight Health. “Having our own ACO means
a number of key benefits that include gaining direct access to key
quality and cost data on our Medicare patients that allows us to
maximize opportunities under the MSSP. We retain the full dollar by
contracting directly with CMS on traditional Medicare which means
more capital to directly invest in programs that can maximize
patient outcomes.”
In 2019 alone, ACO’s saved Medicare nearly $1.2 billion while
maintaining a high level of care quality as measured by
longstanding program metrics. ACO’s allow access to key data points
including cost and quality data that can help providers understand
how to maximize health outcomes and cost of care. For most
independent providers, access and use of this data is a significant
barrier to value-based care participation. Removing the barrier of
access to the data, together with the integration of its
proprietary analytics capabilities, Skylight expects to realize
enhanced clinic performance and an improved strategic acquisition
strategy.
Skylight expects to realize 3 key benefits from this
acquisition:
- Direct CMS contracting for
Traditional Medicare – under the MSSP, Skylight expects to
receive in Year 1, up to 40% of the shared savings realized through
programs and services aimed at optimizing patient outcomes and
reducing cost of care. The Company expects to enter full risk
contracting, which could see up to 75% of shared savings and other
value-added incentives, including capitation, as it demonstrates
savings and quality outcomes.
- National Contracting
Platform – through the ACO, Skylight and its network of
providers will benefit from scale and the opportunity to contract
with national payors on managed care programs such as Medicare
Advantage and commercial risk.
- Additional Provider
Participation and Acquisition Opportunities – the ACO
provides a platform for Skylight to gain additional provider
participation. This can lead to opportunities for further
consolidation as providers continue to seek buyers who are aligned
with the practice’s long term patient care model and values.
ABOUT SKYLIGHT HEALTH GROUP INC.
Skylight Health Group Inc. (NASDAQ:SLHG;TSXV:SLHG) is a
healthcare services and technology company, working to positively
impact patient health outcomes. The Company operates a US
multi-state primary care health network comprised of clinics
providing a range of services from primary care, sub-specialty,
allied health, and laboratory/diagnostic testing. The Company is
focused on helping small and independent practices shift from a
traditional fee-for-service (FFS) model to value-based care (VBC)
through our proprietary technology, unique data analytics and our
robust operations infrastructure. In a FFS model, payors
(commercial and government insurers) reimburse on an
encounter-based approach which puts a focus on volume of patients
per day rather than creating positive patient outcomes. In a VBC
model, providers are rewarded for keeping patients healthy and
lowering unnecessary health costs instead of volume of services.
VBC will lead to improved patient outcomes, reduced cost of
delivery and drive stronger financial performance from existing
practices.
FORWARD LOOKING STATEMENTS
This press release may include predictions, estimates or other
information that might be considered forward-looking within the
meaning of applicable securities laws. While these forward-looking
statements represent our current judgments, they are subject to
risks and uncertainties that could cause actual results to differ
materially. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect our opinions only as of
the date of this release. Please keep in mind that we are not
obligating ourselves to revise or publicly release the results of
any revision to these forward-looking statements in light of new
information or future events. When used herein, words such as "look
forward," "believe," "continue," "building," or variations of such
words and similar expressions are intended to identify
forward-looking statements. Factors that could cause actual results
to differ materially from those contemplated in any forward-looking
statements made by us herein are often discussed in filings we make
with the Canadian and United States securities regulators,
including the Securities and Exchange Commission, available at:
www.sec.gov, and Canadian Securities Administrators, available at
www.sedar.com, and on our website, at: skylighthealthgroup.com.
Investor Relations – USA:John
Evansjohn.evans@skylighthealthgroup.com415-309-0230
Investor Relations - Canada: Jackie
Kellyinvestors@skylighthealthgroup.com416-301-2949
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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