The last decade has seen the towering success and maturity of accountable care organizations (ACOs), thanks to their exclusive focus on achieving high-quality care at a comparatively low cost. To be eligible to participate in an ACO, participating physicians must care for a minimum of 5,000 Medicare fee-for-service beneficiaries. This of course is a limiting factor to independent practitioners, as they would not typically meet the minimum required Medicare patients. To combat this, ACOs have grown networks of independent physicians, alliances of care providers, and independent hospitals, which are typically all equipped with unique specialties, abilities, and capacity to handle their patient population.
Do these networks and alliances ensure that success in these ACOs is guaranteed? What does an interested provider or practice needs to do or know? The truth is, ACOs are now more sophisticated than ever before. Succeeding in this space demands that a practice plan carefully and find time to understand the ACOs strategies that have been proven to demonstrate beneficiaries are receiving high-quality care at comparatively low costs.
At a high-level, practices that want to participate in ACOs need to understand three key areas: downside risk, how to utilize the ACO data that CMS provides, and the obligations for physicians. The American Medical Association (AMA)’s guide on ‘Accountable Care Organizations has put together a comprehensive guide on “How to Perform Due Diligence and Evaluate Contractual Agreements’, which also details other considerations such as crucial contract terms, financial incentives, impact on growth and clinical operations, and much more.
Let’s briefly look at the three topics highlighted above:
Understand levels of risk/rewards
Physicians merit the financial incentives and benefits that come with ACOs, but the amount of incentives are solely dependent on performance and desired risk-level or appetite that a practice is willing to engage. ACOs are part of the Medicare Shared Savings Program (MSSP). Just as its name implies, Medicare will ‘share’ a percentage of the beneficiary total cost of care savings achieved with participating providers. The various participation options (also called tracks) to ACOs, have different levels of risks ranging from the basic to enhanced options. ACO levels A and B of basic options, for example, offers 1st dollar savings at a rate of 40 percent if ACOs meet quality performance standard. Enhanced options get 1st dollar savings at 75 percent if they also meet quality performance standards. However this option brings added risk that requires the ACO to pay back a percentage of the beneficiaries’ total cost of care, if at the end of the year the ACO costs ends up higher than the expected benchmark.
Since the basic track rewards clinicians at a rate of 40 percent of savings without the downside risk associated with the enhanced track options, this is the most common type of ACO arrangement. Note that understanding these levels of risk prior to joining an ACO is an important preliminary step.
CMS provides a wealth of longitudinal patient data to ACOs which includes information about services that have been rendered from physicians from across all healthcare facilities and specialties. Imagine the magnitude of knowing exactly the type of services, medications, and labs that have been performed by any provider who cared for your patients. The goal of providing this data is to help practitioners better understand their patient population, in hopes that it will be leveraged to 1) improve beneficiary access to care, and 2) achieve the ACO’s goal of reducing total cost of care (while demonstrating high quality) of services provided.
It’s no surprise the backbone of successful ACO strategies lies in their ability to utilize their data. It’s also important for clinician participants to share their own clinical and billing data with the ACO to enable better tracking of services provided to their beneficiaries. Of course, none of this data is at all useful if the ACO does not have an ability to utilize it to provide timely actionable insights at the physician or practice level.
Providers should know their obligations
As a provider, you are encouraged to engage in the ACO’s strategies. You will play a critical role in 1) assessing the overall health status of your patients who are assigned to the ACO, 2) preparing individualized care plans, and 3) utilizing the ACO’s resources to help close quality and care gaps.
One thing to note here is that ACOs are not meant to be controlling organizations over the clinician practices. They’re rather a contracting and resource avenue to enable your success in combining forces to achieve Medicare Shared Savings and enhance the care of Medicare beneficiaries. As such, ACOs are governed by a board that must be comprised of at-least 75% of their participating physicians. This board which is often guided by the ACO suppliers should have the ability to set quality targets, approve care coordination strategies, ensure compliance and ethics standards are set, and have operational oversight.
Understanding how to participate in an ACO is what determines the overall success of an ACO. At a minimum, you’ll need to conduct proper due diligence to understand what is required from a provider. That is ultimately what makes it easier to transition to value-based care. To learn more about what to look for in an ACO, contact Healthmonix today. We are currently providing a no-risk, no-cost opportunity for independent, primary care physicians to join our ACO.