After One Year, Physician-run ACO Scores Big Savings Bonus

Of $22 Million Saved Overall, $11 Million Goes to Member Physicians

August 11, 2014 04:22 pm Michael Laff

Health care policy experts have cautioned that making the transition away from a fee-for-service payment model will be a marathon, not a sprint, yet one accountable care organization (ACO) in Florida has moved quickly out of the gate.

[Doctor checking elderly man's blood pressure]

Founded in 2012, the Palm Beach ACO has a 3 1/2 year contract with Medicare. The organization cares for about 36,000 patients and includes physicians from Palm Beach, Broward and Dade counties in South Florida.

More than 75 percent of physicians in the ACO are solo practitioners. There are a total of 240 physicians in the network, and 120 are in primary care. Physicians are free to join and can leave at any time. The organization has no formal hospital affiliation.

Of the initial 114 ACOs that participated in the Medicare Shared Savings Program, the Palm Beach ACO was one of 29 that exceeded savings projections. It saved $22 million during its first year and received about $11 million in shared shavings. When combined with shared savings generated by the other 28 ACOs and parceled out among those ACOs' participants, each member physician's share came to about $63,000, according to a recent article( in JAMA: The Journal of the American Medical Association.

No Practice Changes Required

Physicians who join the Palm Beach ACO are not required to make practice changes. If a practice decides to make adjustments such as extending office hours, answering phones after hours or hiring additional staff, it does so at its own discretion.

Story highlights
  • One accountable care organization (ACO) in Florida realized significant savings in Medicare costs during its first year of operation.
  • The ACO uses Medicare billing data to identify patients who are behind on their medication or who need to come in for a wellness visit.
  • In this ACO, decisions about patient care are made by the physician, not a hospital or an insurance company.

"It is physician-owned and physician-run," said Lenny Sukienik, M.D., the group's medical director. "Every physician has skin in the game."

A representative of the ACO visits each physician's office three times per month, and a medical director -- either Sukienik or family physician Theresa Goebel, M.D. -- visits once each quarter. Additional networking meetings are scheduled frequently at member physicians' offices.

Sukienik said ACO officials provide consultation services and share best practices with member physicians, but each practice is run independently. He stressed that ultimate decision-making for patient care should rest with the physician in concert with the patient, not with a hospital or an insurance company.

"Physicians need to run ACOs," he said. "If you have a hospital running an ACO, it won't work."

Recognizing that physicians likely would be skeptical about their potential for success in the ACO, David Klebonis, chief information officer for the Palm Beach ACO, said the organization's growth occurred in grassroots fashion. Members hosted meetings and invited other physicians to attend. Physicians spoke at various events and eventually, membership expanded by word of mouth. The group had no marketing plan for expansion.

"It was physicians speaking to physicians," Klebonis said.

Although some physicians and health care analysts scoffed at the early returns on ACO performance, Klebonis argues that after just one year and given the hurdles associated with a major transition in delivery of care, the fact that 25 percent of ACOs exceeded projections should be considered a success.

Information-sharing Benefits Participants

Physicians in solo private practice may find it difficult to remain abreast of new Medicare policies that could help their practice. Sukienik said he attended a recent conference with family physicians where the guest speaker asked attendees if any of them did wellness visits, which Medicare pays for. Sukienik was the only one to raise his hand. He said the ACO helps physicians stay current on the latest Medicare changes with updates delivered by email or via office visits.

In this case, Medicare pays $177 for the initial annual wellness visit and $116 for subsequent wellness visits.

So, said Sukienik, "Instead of waiting two years to do a wellness visit, you can start them right away. Medicare is constantly changing (its) rules."

But what truly distinguishes the Palm Beach ACO from traditional physician practices is its strategic use of data. Medicare provides the ACO with detailed patient billing data. Physicians can analyze those data for their entire patient population or for each individual patient to pinpoint all care received, including ER visits, subspecialist visits or visits outside the practice area.

"The data (analysis) is so important, much more important than we thought," Sukienik said. "It makes a huge difference in how we treat patients. The physician thinks about it in a different way. Medicare patients can go anywhere. A patient could travel to New York and have three COPD (chronic obstructive pulmonary disease) visits and you'd have no way of knowing that."

Population health is vastly improved by using the Medicare patient data, according to Goebel. Physicians can identify which of their patients are coming in for wellness visits and which ones are not obtaining their flu shots. Women who did not receive mammograms can be reminded to do so.

Still, the population health aspect could be further improved if large insurance companies such as Cigna and Blue Cross/Blue Shield also released their patient data and made it available to physicians in a usable format, Sukienik noted. "Medicare is way ahead of the game," he said.

Care Focuses on Patients

Transitional care management of patients who have been recently discharged from a hospital or a skilled nursing home is another area of care that is ideally suited to the ACO model. Medicare requires that the patient is called within two days of discharge and visited within seven days. The facility cannot bill for the care if the patient is readmitted to the hospital within 30 days.

The ACO receives as much as $244 for a highly complex transitional care visit, according to Goebel and can bill $173 for consulting a transitional patient within 14 days of hospital discharge if the care is not considered complex.

Whereas other ACOs hire care coordinators or coaches to handle the tasks that a physician may not have time for, the Palm Beach ACO does not employ care coordinators. Sukienik said he recognized that some organizations use that model successfully, but the Palm Beach organization's philosophy is that the physician should continue to serve as the focal point of care.

Ultimately, providing care that is convenient and timely for patients is crucial because 25 percent of the organization's annual report card is tied to patient satisfaction, said Klebonis.