By Lauren Moughon
With the recent Supreme Court ruling upholding health care reform, the release of final rules governing Accountable Care Organizations (ACOs), and the July announcement of 89 new federally-sponsored ACOs , integrated care provided through ACOs is rapidly becoming a reality in U.S. health care.
For many clinicians, though, questions linger. Just what is an ACO and will the ACO concept last? What are the concerns, risks and rewards involved with practicing as part of an ACO? How might ACOs grow beyond their original conception?
Dr. Robert Provenzano, vice president of Clinical Support Services in the Office of the chief medical officer at DaVita, is an expert who regularly blogs about ACOs and integrated care.
“There’s a lot of nervousness out there about what ACOs mean for physicians generally, and nephrologists specifically,” Provenzano said. “But the truth is, there are great opportunities for empowerment in caring for patients, providing better-quality coordinated care and sharing in the rewards of reducing costs.”
What is an ACO?
The Centers for Medicare & Medicaid Services (CMS) website devoted to ACOs defines them as “groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.”
Coordinated care—also referred to as integrated care—offers the possibility of reducing preventable medical errors, reducing administrative burdens and duplication, and providing better care to the most vulnerable chronically ill patients.
Moreover, when a federally-sponsored ACO is able to reduce costs for its defined population of patients, it shares in the savings achieved by Medicare. Savings in the Medicare Shared Savings Program are calculated based on a three-year historical data for a particular patient population, creating a pay-for-performance model based on 33 quality metrics. In short, providers get paid more when their patients are healthy and hospitalizations are reduced.
Federally-sponsored ACOs can be formed through the Medicare Shared Savings Program, the Pioneer ACO model or Physician Group Practice Transition Demonstration organizations. In all, 154 organizations have been approved for ACO status—many of them physician-led.
“At this point, fears that ACOs would be dominated by a particular provider category seem to be fading,” Provenzano said. “There’s a lot of diversity in the groups coming together to provide integrated care, and while it’s still early going, it looks like there will be quite a bit of flexibility around types of practice arrangements.”
Concerns, Risks and Rewards Provenzano said the top concern he hears from colleagues is that ACOs are simply HMOs dressed differently for the new millennium.
“Lots of folks are expressing the worry that ACOs are just HMOs in disguise,” Provenzano said. “But ACOs are very different. They offer much more freedom and empowerment for both physicians and patients than the HMOs of the 1990s.”
Joining an ACO is voluntary for any physician, and patients have no restrictions in the providers they see. While cost reductions will depend at least in part on patients receiving most or all of their care within the ACO, any patient can see any provider, any time. It’s up to the ACO to engage patients and provide care that encourages organizational adherence.
While clinicians may fear a loss of income in the ACO model, options are available that reduce or eliminate that risk.
Under the ACO model, standard fee-for-service payments from Medicare remain the same. ACOs will also have the option of receiving a percentage of savings achieved. ACOs with a low tolerance for risk can receive smaller payments for savings achieved and assume no risk if cost reductions fail to materialize.