Championed by the Affordable Care Act, accountable care organizations (ACOs) are networks of primary care physicians, specialists and hospitals intended to improve health outcomes and reduce treatment costs for Medicare beneficiaries. Legal entities, ACOs can take many different forms, from one large multispecialty group functioning alone to many independent small practices working together with a hospital. An ACO must serve at least 5,000 Medicare patients.
The Centers for Medicare and Medicaid Services offers ACOs the chance to participate in the Medicare Shared Savings Program, an initiative launched in April 2012. By meeting specific quality benchmarks and reducing the costs of caring for Medicare patients in the existing fee-for-service payment model, ACO member physicians are able to share in the savings realized by Medicare.
To earn this incentive, an ACO must achieve at least a 2.2% reduction in Medicare expenses. The bonus is also affected by the ACO’s performance on 33 quality measures related to patient and caregiver experience, care coordination and patient safety, preventive health, and protocols for at-risk populations with diabetes mellitus, hypertension, ischemic vascular disease, heart failure or coronary artery disease.
The Congressional Budget Office estimates that ACOs could save the U.S. health care system $4.9 billion through 2019. Individual physicians, especially those in primary care, also derive many advantages from taking part in ACOs, says family physician Ira P. Monka, DO, MHA, who chairs the governing board of the Morristown, N.J.-based Atlantic Accountable Care Organization, one of the country’s largest ACOs.
In the following edited remarks, Dr. Monka discusses the benefits of participating in an ACO.
Why should DOs in primary care join or form an ACO?
First and foremost, ACOs help primary care physicians get higher reimbursement by reducing the costs involved in caring for the sickest patients. In the Medicare Shared Savings Program, CMS rewards ACO member physicians for Medicare cost reductions. The program brings added income into physicians’ offices, but it’s not for physicians to put in their pockets.
Physicians are expected to reinvest this money into their practices. For example, they can put this money into developing electronic health records or hiring additional staff. In other words, the increase in reimbursement helps doctors make the transition to care needed for the future. By being part of an ACO now, primary care physicians put themselves in a better position for the many changes that lie ahead in health care.
How do ACOs help reduce Medicare costs?
By improving the quality of care and care coordination, you decrease emergency room visits and hospital admissions and readmissions. Each office in an ACO is expected to meet the quality guidelines Medicare has established and report its data. Roughly two-thirds of the 33 quality measures are reported by the doctor, such as hemoglobin A1c control, depression screening and influenza immunization. The other third of the measures are based on surveys of patients or caregivers.
Medicare will actually contact patients and ask them, “Are you satisfied with your care? Does your doctor return phone calls promptly? Does he or she see you promptly?”
The way to realize the biggest savings is to identify your sickest patients—the 5% to 15% who demand the most care and cost the most. The ACO can then set up centers of excellence to help such patients by giving them added services, such as home care. For example, after one of these patients is discharged from the hospital, a nurse practitioner could visit the home to assess the patient’s needs.
At the Atlantic Accountable Care Organization, we have numerous centers of excellence, including heart failure, cardiac valve, diabetes, oncology and pulmonary. Primary care physicians, specialists and other clinical team members work together to make sure the Medicare patients served by these clinical centers receive the best care.
The sharing of data by ACO member physicians and hospitals also helps reduce the duplication of laboratory and radiological services.
What is significant about your ACO?
The Atlantic Accountable Care Organization was approved by Medicare and got up and running on April 1, 2012. It was one of the first 27 ACOs—and remains the largest ACO—to participate in the Medicare Shared Savings Program.
We were very large out of the starting gate, with roughly 16,000 Medicare lives in our ACO. Today, the Atlantic ACO includes four hospitals and more than 1,700 physicians and serves more than 87,000 Medicare beneficiaries.
The most exciting thing happening right now is the commercial side of our ACO. We’re negotiating contracts with large private insurers that will reward us if we provide better care at lower costs to all patient populations covered by these health plans.
The commercial side is probably going to be more than three times the Medicare numbers. As of July 1, when you look at our current contracts, our ACO will be serving close to 270,000 patients.
I understand the ACOs can have many different structures. Are there advantages to certain configurations?
It is a big investment to get an ACO up and growing, so financial backing from a hospital or health system is a big plus. You want to avoid putting doctors at risk for losing money. If you form an ACO on your own and you don’t reduce your Medicare costs, you will get nothing back from the Medicare Shared Savings Program. As a result, you won’t recoup your investment.
ACOs that consist of a single large health system have an advantage when it comes to data collection and reporting because all of the members will be on the same electronic health record system.
What are the disadvantages to participating in an ACO?
It’s going to be more time-consuming for your office, not only for physicians but for staff members. They are going to have to assist in data collection and make sure that the policies and procedures of the ACO are followed.
Some physicians just don’t like other people looking at all of their records. At meetings, I’ll go up to some of my colleagues and say, ‘If you’re a primary care doctor, why aren’t you in an ACO?’ I don’t understand some of the answers I get. But not everyone wants to participate.
There is a fallacy that physicians will owe money back to somebody—that they will get stuck with some bill at the end of month. That’s not true. Also, some physicians think that the ACO model is going to fail, so they say, “Why should I get involved now?”
What do you think the future will hold for ACOs?
I think this is a transitional care model. We are going to be continuously changing the way we practice. The ACO model is for today: It’s a way of getting doctors and hospitals aligned to bring costs down and cut the fat out of the current system.
ACOs are helping us learn ways of practicing that are more efficient and better for the patient and save dollars for the U.S. health care system.