ACO planning guide: Strategies for value-based health care
An ACO’s organizational structure can impact how it operates and its likelihood of success.
An accountable care organization (ACO) is an agreement among medical care groups to share responsibility for the quality, cost and coordination of care for a population of patients.
Because ACOs can comprise group practices, networks of practices, hospitals, hospitals employing other physicians and clinicians, hospital-physician joint ventures or virtual groups, a key element for success is primary care physician leadership.
ACO structure: Implications and considerations
When it comes to organizational structure there are three categories of ACOs: Hospital led, independent practice associations (IPAs) and clinically integrated networks (CINs). Each has its pros and cons. Here’s what to consider.
Usually better capitalized, better managed, larger and more able to realize savings across a wider range of care settings.
May be too "hospital oriented," spending more time and effort improving quality and efficiency of care than working to keep patients out of the hospital.
Can get trapped in the traditional view of primary care networks as referral channels funneling patients into hospitals.
Key requirements for an ACO
In a Medicare ACO, providers and suppliers of services (e.g., hospitals and others involved in patient care) work together to coordinate care of Medicare beneficiaries. The Affordable Care Act (ACA) requires the prospective ACO to establish a governing body with the authority to execute the ACO’s functions. The governing body must have a fiduciary duty to the ACO and must act in a manner consistent with that fiduciary duty. Regulations require the ACO to be responsible for routine self-assessment, monitoring and reporting of care it delivers.
This information should drive continuous improvement of the care delivered to the attributed patient population.
Additional eligibility requirements for a Medicare or commercial ACO may include encouragement and promotion of enabling technologies that improve care coordination for beneficiaries (e.g., EHRs) and other health information technology (HIT) tools. CMS expects ACOs that are ready and able to take on a high level of risk to use certified EHR technology and have robust HIT systems in place.
Leadership for ACO success
Achieving results in an ACO requires perceptive, forward-thinking leaders who can effectively assess gaps, allocate resources, measure performance, showcase best practices, seek innovation and help ACO members keep an eye on the big picture. Successful ACO leaders:
- Articulate how each participant will contribute to patient care, quality improvement and cost reduction.
- Present a compelling, clear vision that makes it easier to accept changes.
- Ensure the organization’s vision, mission, values and performance are aligned, to foster a sense of purpose and responsibility among all participants.
Beneficiaries and ACO participation
Regulations for Medicare ACOs require participants to notify beneficiaries they are participating in an ACO and that the ACO is eligible for additional Medicare payments—if it improves quality and coordination of care while reducing costs. Likewise, an ACO may be financially responsible to Medicare for failing to provide coordinated, cost-effective care. Beneficiaries must also be notified their claims data may be shared with the ACO. They may then choose to decline data sharing or seek care from an outside physician.
Patients in commercial ACOs may not know they have been attributed to a particular physician. In a closed-provider network, such as a point of service plan (POS), the patient selects a primary care physician from the plan’s network. The patient is attributed to this network physician but may not be notified.
A preferred provider organization (PPO) allows open access to a variety of physicians and other clinicians rather than restricting the patient to one, so attribution may be based on historical claims data. This can be problematic because it limits the ACO participant’s ability to coordinate care.
Performance metrics and cost
ACOs participating in the Medicare Shared Savings Program (MSSP) are required to report completely and accurately on the quality measures used to assess their performance. CMS annually assesses each ACO’s performance on a set of quality metrics, comparing the population of Medicare beneficiaries cared for by primary care physicians in the ACO with a benchmark (Home - Centers for Medicare & Medicaid Services | CMS) population to determine whether the ACO qualifies for shared savings.
In both Medicare and commercial ACOs, health analytics should be a primary focus. Data allows physicians to identify patients who are likely to need the most care, take preventive steps to keep these patients healthy and measure the organization’s progress against benchmarks. The use of an EHR is fundamental to an ACO’s success, although it alone is not sufficient to help an ACO achieve its goals.
When a spending benchmark has been finalized, the ACO should design reports to monitor actual costs and compare them to the benchmark. Physicians should review these reports at least quarterly. With transparent information, the care team can identify patients who are likely to need the most care. This allows physicians to take preventive steps to ensure these patients receive appropriate attention to eliminate over-utilization of services.
An ACO’s reports should accurately reflect the patients for which ACO participants are responsible. Some patients in the commercial population may not be enrolled for an entire year. For example, a patient may lose their job and become ineligible, or a patient may become eligible midyear when they start a new job. A Medicare beneficiary may not be enrolled for the entire year due to his or her death or if they choose a Medicare Advantage Plan that starts January 1 of the following year. Data from partial years are less credible, so it may be prudent to only attribute patients with 12 months of experience to the ACO for reporting purposes.
Questions to ask before committing to an ACO
In order to receive and distribute payments, repay shared losses, report compliance with eligibility and program requirements and have appropriate authority over operations, an ACO must have a legal structure and knowledgeable, effective physician leaders.
Consider the following questions to help decide if you’re ready to participate in an ACO:
Does the organization have strong leaders who understand the shift from volume to value and the associated complexities of an ACO?
The organization should demonstrate its commitment to achieving the Quadruple Aim by providing the necessary resources and having an experienced leadership team, medical director and qualified health care professional(s) to lead the quality assurance/improvement process.
The leadership team should agree upon the vision and mission of the ACO and should communicate these clearly to all administrators and clinicians.
Are stakeholders willing to be involved in goal setting?
To achieve specific goals, the ACO must have appropriate resources to carry out functions necessary to ensure the successful delivery of efficient, integrated care.
A clear and realistic timeline for practice transformation informed by stakeholder input should be established.
Can ACO leadership communicate to stakeholders how each will contribute to patient care, quality improvement and cost reduction?
Tools which ACO participants can use to engage patients include a patient portal, same-day access, 24/7 access to the care team, urgent care availability for after hours and personalized care plans.
The EHR tracks clinical data that are used to set benchmarks, such as lab and test results, medical history, medications and procedures.
ACO participants should have access to and fully understand cost of care data from payers. Information about patients who receive a high percentage of their care outside of the ACO should also be available. This “leakage” can be a source of significant costs for the organization.
Does the ACO understand your local health care market, including competition, prevalent diseases, the attributed population of patients and cost drivers for your community?
To achieve its goals, an ACO should monitor the health status of its community to identify health problems and diseases commonly encountered in primary care and account for significant cost and burden.
The ACO is held accountable for a specific number of assigned patients. Attribution of patients to physicians is a component of cost and quality performance measures.
ACOs can access ACO-specific reports via the Medicare Shared Savings Program (MSSP) portlet and commercial payer data to analyze quality reports and cost drivers (e.g., hospital readmissions, unnecessary emergency room visits, duplicative services, unnecessary care) for the attributed population.
Transitions in care should be well-coordinated across different settings and physicians.
A methodology to identify and manage high-risk patients should be in place.
ACOs should identify community resources that support the population.
Does the organization meet requirements for its formal legal structure and governing board?
An ACO must be a recognized legal entity formed under applicable state, federal, or tribal law. It must be authorized to conduct business in each state in which it operates with the purpose of:
- Receiving and distributing shared savings
- Repaying shared losses or other monies determined to be owed to CMS
- Establishing, reporting and ensuring compliance with health care quality criteria, including quality performance standards
Legal issues on the federal level include antitrust laws, the Stark Law, the Anti-Kickback Statute, the Civil Monetary Penalties Law and tax exemptions.
Legal issues on the state level include licensing, corporate practice of medicine, fraud and abuse laws, antitrust laws, provider referrals, securities laws and false claims acts. In order to be eligible to participate in the MSSP under CMS, an ACO must establish an identifiable governing body to execute functions of the ACO. The MSSP also requires the following of the governing body (Home - Centers for Medicare & Medicaid Services | CMS):
- It must have responsibility for oversight and strategic direction and hold the ACO management accountable for the ACO’s activities.
- ACO participants must have at least 75% control of the governing body.
- The governing body must include a Medicare beneficiary served by the ACO who does not have a conflict of interest with the ACO personally or within their immediate family.
- Members of the governing body must have a fiduciary duty to the ACO and act accordingly.
- The governing process must be transparent.
The ACO must have an experienced leadership team, medical director and qualified health care professional(s) to lead its quality assurance/improvement process. This demonstrates that the ACO has the organization, commitment, leadership and resources necessary to achieve the Quadruple Aim.
Participation in the MSSP requires the ACO to accept responsibility for at least 5,000 Medicare fee-for-service (FFS) beneficiaries. An ACO is not eligible for the MSSP if it includes any participants who are participating in another Medicare initiative that involves shared savings.
Next steps
Learn all you can about an ACO before you commit. Talk to colleagues. Consult your AAFP chapter, your state’s medical society and a good health care attorney.