As the health care environment shifts from fee-for-service to a value-based payment model, physicians will be held financially accountable for the quality of care they provide. Performance scores will be used to determine physician payment adjustments so it’s easier to achieve a more favorable score as part of a larger group, such as an accountable care organization (ACO). An ACO is a group of health care professionals who agree to share responsibility for the quality, cost, and coordination of care for a defined population of patients.
“The larger you are, the better chance you’ll have to do well in this new high-quality, lower-cost health care industry,” says Lauren Cover, a health care consulting manager for Aldrich CPAs + Advisors. Big groups may also find it easier to manage their information technology needs, negotiate better payer contracts, and obtain lower rates from vendors and service providers.
Born out of the Patient Protection and Affordable Care Act, the ACO model is designed to increase quality of care and reduce costs for patients.
Participating in an ACO can also help physicians navigate the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA). MACRA repeals the controversial sustainable growth rate formula and establishes 2 payment tracks to reward physicians for providing higher-quality care.
Practices with more than 5,000 Medicare fee-for-service beneficiaries can participate in the Medicare Shared Savings Program, which rewards ACOs that lower their health care costs while meeting performance standards on quality of care and putting patients first, according to the Centers for Medicare & Medicaid Services. Since 2012, Medicare ACOs have generated more than $1.29 billion in total Medicare savings.
Factors to Consider Before Joining
Physicians seeking to join an ACO can choose from national, regional, and private ACOs, but they can also create their own organization with other interested health care professionals. ACO members share financial benefits as well as financial risks, and prospective members must consider those risks before joining.
“A lawyer has to be involved in the agreement,” Cover says. “There’s a risk component that has to be negotiated and reviewed because you’re on the hook for paying money if you don’t do well.”
The ACO contract also outlines the governance arrangement. Cover recommends searching for an organization that allows input from all members. “You don’t want to join an ACO where your voice won’t be heard,” she explains.
In addition, having a well-run practice is essential for joining an ACO. “Make sure you’re doing things efficiently and that you have good processes, policies, and procedures in place,” says Cover. “In an ACO, you’re responsible for the group—you want to make sure you’re doing your best before joining because that’s what will be required of you to be successful in an ACO.”
Prospective ACO members also need to consider how they will actively work to improve quality and lower costs. “Physicians have to think about what they’re going to do differently to keep people out of the emergency department, prevent readmission, and shorten the number of days in the nursing home,” explains John Bender, MD, a member of the board of directors of the American Academy of Family Physicians and board chairman for Physicians Accountable Care Solutions, a nationwide ACO. “How will they coordinate care with specialists and with their hospitals, and how will they engage patients to participate and not just go to the emergency department for everything?”
MACRA and Electronic Health Records
Under MACRA, all health care professionals will need patient and practice data to calculate their performance score. Practices interested in joining or creating ACOs are expected to be using an electronic health record (EHR) system.
“Providers must have data. You can’t do this on a paper chart—you need EHRs,” says Bender.
New members will be required to share EHR data, but aggregating data for thousands of patients can be costly. Ask prospective ACOs whether they pay for data aggregation or whether your practice is responsible for that expense. For practices that haven’t yet switched to an EHR system but would like to join an ACO, Cover suggests identifying the organization in which they’re interested and begin implementing that group’s EHR system.
Establishing an ACO
Benjamin Money, the president and chief executive officer of the North Carolina Community Health Center Association, formed an independent physician association in 2013 to create partnerships among the association’s health centers. In 2015, Money and his team formed the Carolina Medical Home Network Accountable Care Organization, which currently includes 9 health center participants.
There have been growing pains, Money admits. “The challenge was allowing each health center to continue its autonomy and still encourage and support the development of shared best practices,” he says.
Get to know your potential partners, Money advises, and be flexible. “Allow the time to develop that culture of collaboration,” he says.
Cover echoes Money’s advice. “You have to make sure that you trust the other groups or practices within the ACO—it’s a whole group now; it’s not just you,” she says.