Accountable Care Organizations

Dr. Jitesh Chawla explains the role of Accountable Care Organizations

An accountable care organization or ACO, is a relatively new concept that may be an important tool to achieve greater quality of care for our patients and overall control costs for the entire healthcare system. There are 3 main components to any ACO, which are summarized as follows:

1. The ability to provide and manage patients across a variety of institutional settings (inpatient, outpatient and post-acute care).

2. The ability to prospectively provide budget and resource planning.

3. The infrastructure to support comprehensive, valid and reliable measurement

The ACO differs from other types of payment reform initiatives such as the medical home and bundled payments models as” total per capita costs” are not part of those arrangements. Full capitation does account for total per capita costs but requires patient “lock in”, which may not appeal to most providers. Patient “lock in” means that the insurance benefits will allow the patient has to use only that provider

Under the Patient Protection and Affordable Care Act, ACOs are voluntary options to adopt for those who treat Medicare beneficiaries. The Secretary of the US Health and Human Services may give favor to providers that are in certain arrangements with other payers besides the federal government. These groups include professionals in group practice arrangements; networks of individual practices of professionals; partnerships or joint venture arrangements between hospitals and professionals; hospitals employing professionals and such other groups of providers and suppliers of services that the Secretary deems appropriate.

It is will be interesting to see if ACOs really end up doing what they are designed to. Critics dub it as a form of HMO (health maintenance organization). Only time will tell.

PART 2 ACOs:

As providers we are always bombarded with new regulations, government mandates and creative insurer plans or programs designed to help us increase our revenue. But with limited time and other resources, doctors and mid-levels need to quickly and clearly understand if some new program is right for them. With that in mind, here is a summary of Accountable Care Organizations based on what we know about them from the latest CMS regulations and a pros/cons analysis to help you decide if it is something you want to participate in.

Definition:

An accountable care organization is a group of providers and suppliers of services that coordinate to provide high quality care (as defined by CMS) to a group of Medicare beneficiaries who are not in a Medicare Advantage program

• Providers from individual practices, group practices or a network of ACO professionals can participate regardless of speciality
• The financial benefit is that providers can get the savings from care provision in an ACO program as extra revenue
• The risk is that providers may share in the loss of money from care provision in an ACO program

The requirements to participate are:

• File application with CMS,

• Form a legal entity that is linked through bank accounts with CMS,

• Have at least 5,000 Medicare beneficiaries over 3 years in panel,

• From governing body with at least 75% of individuals participating in ACO.

• Have a Board certified physician as medical director, CMS liason on ACO leadership
  committee

• Have quality improvement program and abiility to identify high-risk individuals in place

Approval is a for a 3-year period at stretch

What quality measures are tracked:

• Patient-care giver experience

• Care coordination

• Patient safety

• Preventative health
• At risk population/frail or elderly

These measures are tracked by comparing to benchmark data sent by CMS and scores 1-5 are assigned to each.

If the performance is better than the benchmark then savings occurs, if not then loss.

Pros- ACOs:

• Can result in extra revenue through cost savings
• Help organizations establish valuable care processes (ie. quality improve program, tracking certain data, better of electronic medical record functions)
• Results in better coordination of care for the patient

Cons-ACOs:

• Time-consuming to set up an ACO and run it
• Could be costly from setting up the ACO, loss from performance below benchmarks
• Too many unknowns -not sure what new rules CMS will require in years to come

The ideal ACO participants:

Practices that have several providers and staff, have a QI program, use the EMR to track outcomes and have a large Medicare population.

Quotes about ACOs from different experts in the field:

“But if ACOs models are to work, they’ll eventually have to embrace smaller practices, which make up the vast majority of U.S. medical groups overall. And if those groups are either EMR-less or just getting started, it’s going to be pretty tough to share value-based payments, coordinate across episodes of care and track quality jointly” -Kathryn Rourke (EMR and EHR)

“But here’s the problem with ACOs: They are a tool in a big tool box of care and cost management tools but, like all of the other tools over the years like HMOs and IPAs, they won’t be used as they were intended because everybody—providers and insurers—can make more money in the existing so far limitless fee-for-service system.” – ROBERT LASZEWSKI (The Healthcare Blog)

Conclusion:

Accountable care organizations represent, yet, another paridigm to deliver high-quy ality care. The summary about ACOs presented here is very cursory with specific details that are available on the CMS website .

I hope the information presented here will give you, as provider, a feel for wether the ACO program is something that you qualify for and want to participate in. My opinion is that ACOs are not a good return of investment for small practices with 1-3 providers or any practice without the extra resources do devote to this.

-by Dr. Jitesh Chawla

Dr. Jitesh Chawla is a Family Practice Physician with a focus on quality service. Dr. Chawla is particularly popular for his lecture on the developments in the field of health policy, healthcare reform, practice management and quality service. As a student of Healthcare Administration, Dr. Chawla presents unique insights ranging from practical challenges that clinicians face to opportunities that lie untapped in delivering world class healthcare.

YouTube videos by Dr. Chawla site links - http://youtu.be/BaowHBKFmW0 and http://youtu.be/MjeIv5_z7K4