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FAQs about ACOs
What is an accountable care organization, or ACO?
Why should you care about ACOs?
Success in the future will require that you monitor and manage quality and efficiency. As a family physician, you should work toward implementing the patient-centered medical home (or PCMH) which includes the use of patient registries, team care, care coordination and health information technology. These capabilities will be rewarded in the new payment environment with enhanced payments and incentives.
Are there different types of ACOs or ways to structure an ACO?
Unless an ACO is able to reduce fragmentation of care, waste and variability, it will not be successful in the long term. Organizations seeking to form an ACO are initially designing the organizational structure to participate in the Medicare ACO Shared Savings Program (MSSP). The Centers for Medicare and Medicaid Services (CMS) has proposed specific rules of conduct for this program. The AAFP’s summary of the final MSSP rules are available to read online.
Approximately 75% of the initial 27 ACOs participating in the MSSP are physician led organizations. Physician associations, particularly independent practice associations (IPA), are recognized as a critical component for launching successful ACOs. An additional 89 MSSP participating ACOs were announced on July 9th, 2012.
What is an IPA?
How do you get paid in an ACO?
The AAFP supports a blended payment model which includes a fee-for-service component, a care-management fee, and performance incentives based on clinical measures. The three components must be appropriately balanced– such as 50% fee-for-service, 20% care-management fee and 30% performance incentives– to achieve the desired results.
What is shared savings and how will the savings be distributed to providers?
There should be some savings to be shared between the payer– the government or the employer– and the providers. How that savings is calculated and distributed to the various players should be specified in the contracts between the parties. If shared savings are the only source of funding for incentives or infrastructure support, there is a danger that the amount of money for those purposes will diminish over time as the ACO achieves higher efficiencies resulting in diminished savings.
Can you form an ACO with other physicians?
What is a virtual ACO?
How is an ACO different from managed care and capitation models that were prevalent in the 1990s?
Significant changes, in terms of information technology and performance measurement, now allow for better monitoring of quality. The health care industry has been fundamentally altered by the growing prevalence of data on nearly every aspect of care delivery and purchasing.
What kind of risk are we talking about?
What is risk adjustment in the context of ACOs?
A simple example of risk adjustment might be differential payment levels based on age and gender. Proper risk adjustment should discourage ACOs or providers from shunning sicker patients or "cherry picking."
Can an insurance company or a health plan be an ACO?
One of the most significant developments of the ACO model is that major national insurance carriers such as Aetna, WellPoint/Anthem, and UnitedHealthcare have announced that they will be rolling out or supporting the development of ACO networks across the country.
How does the PCMH fit into an ACO?
Other components could include specialty care, imaging, laboratory services, hospital care, and information technology support. Each component must be integrated, coordinated and contribute to the overall efficiency of the ACO enterprise.
Moving your practice to the PCMH model is a great way to assure that you can demonstrate both quality and efficiency to any ACO in your community seeking primary care services.
You have a small practice and don’t want to sell to the hospital; what are your choices?
Leading ACO experts have come to the opinion that non-hospital affiliated and independent primary care practices stand to benefit the most from the development of the ACO model. If you want to participate in an ACO, but not sell your practice, consider exploring joining, or starting, an IPA affiliated with a local ACO program.
There will be slower growth of ACO activity in rural and underserved metropolitan markets. You are likely to see most of the early ACO activity in highly competitive markets.
How can you be sure you won't be left out of the ACO in your community?
How is efficiency measured, and where can you find out how you are doing?
In addition, numbers like the average total cost per patient, length of stay, bed days per 1000 patients, emergency department visit rates, and hospital readmission rates will all be important determinants of efficiency.
Health plan medical directors often have access to this type of information and should be willing to share it with you. It is most valuable if they can also show how you compare to aggregate numbers for peers in the community.
What should you consider when approached to sell?
Is the entity willing to support infrastructure improvements, such as electronic health records, registries, care coordination, and team care? Will your pay be based only on relative value unit production, or will there be more balanced incentives? Will there be some way for you to participate in profits from the overall efficiency of the organization?
As with any potential new position, look carefully at the total benefit package, including insurance coverage, disability coverage, retirement plan, time away from the practice for vacation and CME opportunities, work hours, and call schedules. Unfortunately, the practice itself will be valued based on accounts receivable, facilities, furniture, and equipment, all priced at discounted or depreciated levels.
How will the Stark Law and anti-kickback laws impact ACOs?
Are ACOs just a passing fad or are they here to stay?
The AAFP encourages all family physicians to engage in clinical performance measurement and to move their practices toward the PCMH model. The payment system must change, and comprehensive, capable primary care practices will be valued higher than those practices that do not move toward the medical home model.
Are the monetary incentives sufficient to drive transformation in practice patterns purely on the basis of economics?
Fee-for-service payment has clearly been shown to drive volume of services without regard to quality or necessity. If 90% of physician compensation comes from fee-for-service, 5% for a care-management fee and 5% for efficiency and quality, there will be no substantial change in behavior.
A more balanced ratio is required; for example, compensation should be a mix that is more like 50% fee-for-service, 20% for a care-management fee, and 30% for quality. The money available to individual physicians as a result of shared savings is likely to be a small percentage of their total compensation and may come at a time far removed from the point-of-care decisions. As a result, the amount of money may have little effect on current behaviors and choices.
Can you be in more than one ACO?
The final rules of the CMS MSSP do provide an opportunity for primary care physicians filing under several Tax Identification Numbers (TIN) to participate in multiple MSSP ACOs, but this option is not very feasible.
Alternatively, in many markets across the country there is a possibility that a family physician could participate in a MSSP ACO in their market while also participating in an entirely separate ACO operating only in private sector ACO contracts.
Given the ACO rollout is still forming, the AAFP is working to develop information for members seeking to participate in multiple ACOs.
How are the patient panels determined?
The CMS MSSP does not require patients to designate a particular primary care provider and, instead, relies on the use of a preliminary prospective attribution model which will identify Medicare beneficiaries on a quarterly basis.
What is the AAFP doing to help payment reform?
AAFP members and staff have participated on numerous work groups for both quality measures and payment issues. The AAFP has also been an active contributor to the Patient Centered Primary Care Collaborative, an organization that has advocated for health system reform that puts primary care in a central role with appropriate payment.
What actions should you take immediately?
At the same time, you should be making the changes and installing the systems suggested by the PCMH model so that you can respond quickly as the incentives change. Pay attention to what is happening in your market, and determine which players seem to value primary care as more than just a referral hub for hospitals and specialists. Read as much as you can about evolving models of payment and be aware of incentives currently available in your market.