The content below serves as a planning guide to ACOs. Use the list below to jump to a topic you want to know more about.
An ACO’s organizational structure can have implications for the way it functions and its likelihood of success. An ACO can be almost any combination of group practices, networks of practices, hospitals, hospitals employing other physicians and clinicians, hospital-physician joint ventures, or virtual groups. A key element for the success of an ACO is primary care physician leadership.
An ACO may include or hire a management services organization (MSO) that helps with administrative non-medical functions. This may indicate that the ACO recognizes the value of professional management. You may want to ask the ACO, your colleagues, and your AAFP chapter for more information about the reputation and capabilities of the MSO.
A hospital-led ACO may be:
An ACO that includes employed and aligned physicians may have different expectations of and for the two groups. If you are considering such an ACO, make sure you understand how the groups differ for primary care physicians and for referral specialists.
An ACO developed by an independent practice association (IPA) may be:
As IPAs have emerged, they are not just the contracting entities they were in the past. An IPA can be viewed as a supportive organization offering structure and tools that help small and solo physician offices coordinate care. Regional differences may put an IPA at risk. Physicians in certain regions may be well-organized and prepared for a risk-bearing payment structure. However, the opposite may be true in other areas. Some organizations lack the negotiating and management skills that are necessary to coordinate large groups of physicians and patients across regions. If you are considering participation in an ACO developed by an IPA, be sure you fully understand the regional health care culture.
An ACO developed by a clinically integrated network (CIN) may be:
A CIN can have many forms. Its focus may range from something as simple as coordination of efforts for a single clinical condition (e.g., diabetes) to vertical integration (i.e., the coordination of care within a hospital or other setting). Physicians selected to participate in a CIN are those who are likely to achieve efficiency objectives.
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 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., electronic health records [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.
Achieving results in an ACO requires perceptive, forward-thinking leaders who can effectively assess gaps in the current state, allocate resources, measure performance, showcase best practices, seek innovation, and help ACO participants keep an eye on the big picture. Successful ACOs have leaders who can articulate how each participant will contribute to patient care, quality improvement, and cost reduction. A compelling, clear vision can make it easier for people to accept necessary changes, as well as putting information and events into context. Leaders must balance optimism and realism when voicing the ACO’s goals for change. By ensuring the organization’s vision, mission, values, and performance are aligned, ACO leadership can foster a sense of purpose and responsibility among all participants.
To be successful, an ACO must engage physicians in leadership roles to promote culture change, accountability, and adoption of innovation that supports practice transformation. To engage physicians, an ACO must outline clear roles and accountabilities for every member of the care team and build trust among physicians, administrators, and staff. Having physicians’ buy-in to the ACO’s vision, mission, and change management approach is necessary to make this undertaking achieve desired outcomes. In addition, physician leadership is required at all levels of an ACO to drive change and position the organization for success. Key skills of physician leaders include knowledge of the health care environment, professionalism, effective communication, business skills, the ability to inspire others, and expertise in delivering care defined by the needs of a specific patient population.
Regulations for Medicare ACOs require participants to notify beneficiaries they are participating in an ACO and the ACO is eligible for additional Medicare payments if it improves quality and coordination of care while reducing health care 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. Once a Medicare beneficiary has been notified, they may choose to receive care from an ACO physician but decline data sharing, or choose to seek care from a physician outside the ACO.
Patients in commercial ACOs may not necessarily know they have been attributed to a particular physician. In a closed provider network, such as a point of service (POS) plan, the payer or patient selects a primary care physician (PCP) from the plan’s network to be the main health care provider. The patient is attributed to this network physician but may not be notified about the attribution. In a preferred provider organization (PPO), the plan allows open access to a variety of physicians and clinicians rather than restricting the patient to one physician, so attribution may be based on historical claims data. This can be problematic because it limits the ACO participant’s ability to coordinate care.
ACOs participating in the MSSP are required to completely and accurately report 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(www.cms.gov) 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 is not sufficient on its own to help the 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 overutilization 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.
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 determine your readiness to participate in an ACO:
1) Does the organization have strong leaders who understand the shift from volume to value and the associated complexities of an ACO?
2) Are stakeholders willing to be involved in goal setting?
3) Can ACO leadership communicate to stakeholders how each will contribute to patient care, quality improvement, and cost reduction?
4) Does the ACO understand your local health care market, including competition, prevalent diseases, the attributed population of patients, and cost drivers for your community?
5) Does the organization meet requirements for its formal legal structure and governing board?
To be successful, an ACO must have data and analytic tools to support the delivery of improved, efficient population health care that yields financial benefits for the comprehensive network of physicians within the ACO. Having the technological capability to gather and analyze information on gaps in care, readmissions, patient conditions, and cost of care helps the ACO identify opportunities and prioritize interventions. Effectively managing data through an EHR system and a health information exchange (HIE) makes it possible to measure the quality and performance of individual providers within the organization. Understanding the cost drivers of the attributed population also helps the ACO meet its goals.
Does the organization have a data infrastructure to support improvements in population health?
Does the organization track quality measures for the attributed population?
Does the organization understand the cost of care for the attributed population?
In pursuit of the Quadruple Aim, ACOs need to engage in continuous practice transformation, especially in key areas including physician engagement, staffing structure, standardization of evidenced-based care, care coordination, care management, and patient engagement.
How does the organization engage physicians?
The ACO should:
Does the organization support an effective staffing structure?
Has the organization implemented evidenced-base care within the clinical workflow?
The ACO should have a clinical workflow in place that:
How is care coordination and management accomplished?
The ACO should have a system in place so that providers can easily:
How does a care manager support high-risk patients?
Care managers play an important role in providing effective care to high-risk patients in an ACO. Depending on the ACO’s structure and patient population, the ACO itself may employ care managers to support its participants or ACO participants may employ their own care managers.
Within an ACO, a care manager should:
How does the organization engage attributed patients?
Within the ACO:
Learn all you can about an ACO before you commit to it. Talk to colleagues. Consult your AAFP Chapter, your state’s medical society, and a good health care attorney.
Centers for Disease Control and Prevention. Community Health Status Indicators (CHSI) 2015. http://wwwn.cdc.gov/CommunityHealth/homepage.aspx?j=1. Accessed August 29, 2016.
Institute for Healthcare Improvement. Embed evidence-based guidelines into daily clinical practice. http://www.ihi.org/resources/Pages/Changes/EmbedEvidence-BasedGuidelinesintoDailyClinicalPractice.aspx. Accessed April 15, 2016.