Six Things to Know About Medicare ACOs

The health system reform law establishes a new breed of health care delivery system called accountable care organizations (ACOs). There are many different descriptions of ACOs. Loosely defined, a "shared savings ACO" is a collaboration of physicians and health care providers that accepts accountability for the costs and quality of a defined population, such as Medicare, Medicaid, or commercial health plan patients. Conceptually, an ACO should be designed to reduce costs while improving quality by weaning physicians and providers from uncoordinated fee-for-service care. New and future payment models for ACOs may pair fee-for-service payments with incentives, such as bundled payments, partial capitation, or some combination of payment models.

The Patient Protection and Affordable Care Act has two ACO provisions. One addresses pediatric ACOs. The other is called a Medicare "shared savings program." Under the shared savings program, groups that may qualify as ACOs include professionals in group practice arrangements, networks of individual practices of professionals, partnerships or joint-venture arrangements between hospitals and professionals, and hospitals employing ACO professionals.The goal of the ACO model is to shift the U.S. health care system from volume-based payments to "value-based" payments. ACO payment models may include fee-for-service payments paired with incentive-based payments, such as bundled payments, partial capitation, or a combination. Given broad design parameters, no two ACOs may operate alike. Understand the differences and how they may impact your practice and your patients.

Most ACOs envisioned today share these common elements:

  • Cost control : accountability for the quality and cost per patient participating in the ACO;
  • Risk : ability to prospectively establish the organization's budget and resource needs;
  • Data collection : ability to measure performance and use the results to drive improvement;
  • Managed patient care : capability to provide or manage patient care across a continuum of settings; and
  • New payment models : willingness to implement payment incentives that reward health care quality improvement, efficiency, effectiveness, and timeliness.

Sound familiar? It should. Most of these features were central to the HMO or delegated provider networks of the 1990s. Many went bankrupt as a result of insufficient capitation rates, the unfulfilled promise of additional clinical reporting, and inadequate management tools.

Even though the new health system reform law is extremely murky on exactly how the Medicare shared savings ACOs work, many hospitals and physicians already are rushing to form collaborations. Be wary and be informed. TMA strongly suggests that you take the time to learn about these systems and understand their differences and what they could mean to your practice and your patients, before you sign any agreements. Even though no one knows precisely how ACOs will work, TMA does know a few facts.

"My concern is that doctors are rushing, are being enticed, into systems that won't protect them or their patients. I'm afraid physicians who act too early could harm their practice and patients," said TMA President Susan Rudd Bailey, MD.

For starters, the new law is crystal clear on these facts about Medicare shared savings ACOs:

  1. What can you do if you disagree with the government's decision about whether your ACO is eligible to share in any savings? NOTHING. The law specifically prohibits any administrative or judicial appeals of this decision.
  2. What can you do if you disagree with the amount of shared savings the government decides to pay you for your patients under an ACO? NOTHING. The law specifically prohibits any administrative or judicial appeals of this decision.
  3. What can you do if you disagree with the government assignment of Medicare patients to your care under an ACO? NOTHING. The law specifically prohibits any administrative or judicial appeals of this decision.
  4. What can you do if you disagree with the measurements the government plans to use to determine the quality of care you provide to your patients under an ACO? NOTHING. The law specifically prohibits any administrative or judicial appeals of this decision.
  5. What can you do if you disagree with the government's assessment of the quality of care you are providing to your patients under an ACO? NOTHING. The law specifically prohibits any administrative or judicial appeals of this decision.
  6. What can you do if the government terminates the ACO from participating in the shared savings program? NOTHING. The law specifically prohibits any administrative or judicial appeals of this decision.

CAUTION : Treat any ACO agreement you sign as if it were binding. Before signing any legal document, seek advice from your retained legal counsel to ensure that your rights are protected.

For more information about ACOs and to stay current on Centers for Medicare & Medicaid Services regulations, see the TMA Health System Reform Action Center , and read " New Dress on an Old Pig? " in the February 2010 issue of Texas Medicine .


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