Accountable Care Doesn’t Need an Organization

With the January 1, 2012 implementation deadline for ACOs approaching quickly, many practice groups hustle to be ready, some believe they are, and some don’t know where to begin. For many small medical practices, planning for an ACO falls on the back burner as caring for their patients and their practice take precedence—as it should. And the truth is that for most small practices, the potential to share in savings with Medicare through the ACO legislation won’t merit the energy and resources needed to implement or participate in an ACO for three years (or three and a half if it starts after the deadline). One concern for the efficacy of the Medicare Shared Savings Program is that even under the one-sided model for ACOs, where the ACO shares the savings all three years and the losses only in the third, the cost of implementation may exceed any shared savings an ACO may receive. Even with shared loss caps for each year, the Centers for Medicare and Medicaid Services (CMS) can withhold up to 25% of an ACO’s savings as insurance against future losses.

The payment providers would receive from Medicare under the current fee-for-service systems would not change under the proposed rule, but an ACO would have to worry about meeting the CMS criteria for their type of ACO or face penalizing Medicare payment adjustments. The ACO would also have to worry about providing additional reports to CMS, analyzing claims and specific financial and quality data to produce quarterly and annual aggregated reports, conducting site visits, and surveying beneficiaries. The ACO would need to report on 65 quality metrics, broken down into five domains: patient or caregiver experience, care coordination, patient safety, preventative health, and at-risk population/frail elderly health. Furthermore, federally qualified health clinics and rural health clinics cannot form an ACO, though the ACO that includes them can receive incentives assigned on a sliding scale based on the number of Medicare fee-for-service beneficiaries it treats.

At least half of an ACO’s physicians must also meet HITECH meaningful use criteria and reach a minimum savings rate (based on a confidence interval, which is based on the number of beneficiaries) in order to qualify for savings. To throw another wrench into the mix, the Medicare beneficiaries will be retrospectively assigned, which means that an ACO won’t know which of its Medicare beneficiaries are participating in the ACO until at least a year after the ACO begins. The CMS designed ACOs to give their stakeholders (Medicare patients, providers, and Medicare) economic bargaining power to help drive down healthcare costs. However, unless the ACO falls within the guidelines of the Federal Trade Commission and the Antitrust Division of the Department of Justice, the ACO may come under the scrutiny of these entities that can shut it down. And in an ACO model it’s the providers that are accountable, not the payers.

However, an ACO would be able to access prior claims information about a patient from the CMS in order to better understand the patient’s medical history and to reduce unnecessary double testing. Of course, the patient would have to allow this access in writing in order for an ACO to comply with HIPPA.

"Overall, ACO’s definitely appear to be moving forward. That said, participation in an ACO’s (at this time) may not offer enough in terms of benefits or incentives for some medical practices or organizations to participate. It is still not clear how a practice will improve its quality of care through this initiative. However, once these organizations get up and going, the benefits of data sharing could be used for better leverage with the payers and more responsibility in cost containment. The devil is in the details of what is tracked and then how it is reported. So long as that data is relevant to the front line providers, ACO’s have a chance. Without relevance, it is yet another “quality” program is keep up with.

About Clinic Service: Founded in 1974 by James Grow as a medical billing company, Clinic Service has never strayed from its mission: To Maximize the Profit for Physicians and Medical Practices. We believe our market leadership and growth in medical billing and supporting services like EMR and EHR is a result of our focus on customer experience and our internal culture. The Clinic Service culture is founded on learning and personal growth.

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