What makes for a successful accountable care organization?
What Makes for a Successful Accountable Care Organization? November 05, 2015 by Jennifer Bresnick. Medicare and private payers have both pinned a large part of their financial hopes on developing the accountable care organization, which aims to improve coordination, cut costs, and raise quality in a fiscally responsible – but...
How to form an Accountable Care Organization?
· The first step assigns a beneficiary to an ACO if the beneficiary receives the plurality of his or her primary care services from primary care physicians within the ACO. Primary care physicians are defined as those with one of four specialty designations: internal medicine, general practice, family practice, and geriatric medicine.
How do we help accountable care organizations?
What are the Pros and Cons of ACOs?
- Consolidation. It can be argued that this is a benefit, leading to better cross-network scheduling and lower patient cancellations.
- Financial Benefits. For providers, operating successfully within the ACO can lead to financial rewards. ...
- Rising Requirements. ...
- Capitation. ...
- Difficult Implementation. ...
What is an example of an Accountable Care Organization?
An Accountable Care Organization (ACO) is a group of health care providers, with collective responsibility for patient care that helps coordinate services – delivering ... Examples of National ACO Models 1) Medicare Shared Savings Program (MSSP),
Why are accountable care organizations important?
ACOs are structured to create an incentive to be more efficient by offering bonuses when providers keep costs down. They must carefully manage consumers with chronic conditions, focusing on prevention, to impact utilization of services and reduce overall costs of care.
Are accountable care organizations only for Medicare?
Although starting as a public option under Medicare, ACOs have also grown into a force in the commercial payer market. Many ACOs have multiple contracts with payers, including Medicare and one or more private insurance companies.
What is the general purpose of an ACO?
The purpose of an ACO is to enable care coordination that allows a patient to receive the right care at the right time while reducing the risk of medical errors and duplicate services.
What are required functions of accountable care organizations?
The ACA establishes certain duties for participating providers: an ACO has to (1) be willing to become accountable for the quality, cost, and overall care of a defined population of Medicare fee-for-service beneficiaries; (2) agree to participate in the program for at least three years; (3) have a formal legal ...
What is the purpose of an MCO?
Managed Care Organization (MCO) — a healthcare provider whose goal it is to provide appropriate, cost-effective medical treatment. Two types of these providers are the health maintenance organization (HMO) and the preferred provider organization (PPO).
What is a Medicare ACO plan?
Accountable Care Organizations (ACOs) are one way that we're working to better coordinate your care. If your primary care provider participates in an ACO and you have. Original Medicare. Original Medicare is a fee-for-service health plan that has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance).
What are the advantages and disadvantages of accountable care organizations?
The Pros and Cons of Accountable Care OrganizationsThe Value-Based Payment Structure. ... 3 Key Needs of Accountable Care Organizations. ... Bonus payments can be significant. ... ACOs bring practices closer to patient-centered care. ... ACOs provide better quality care at a lower cost. ... ACOs support independent practice.More items...
What value does the ACO accountable care organization present to patients?
The goal of ACOs is to achieve the triple aim of: (1) improving the population's health, (2) improving the patient and family care experience, and (3) reducing the costs of care.
Are ACOs effective?
Reviewing the first three years of the Shared Savings Program, the study found that the 428 participating ACOs improved performance on 82 percent of individual quality measures while serving 9.7 million beneficiaries. The ACOs also outperformed fee-for-service providers on 81 percent of the quality measures.
What is a Medicare Accountable Care Organization ACO and its key features?
An ACO is a group of health care providers who take responsibility for the total cost and quality of care for their patients, and in exchange they can receive a portion of the savings they achieve. An ACO agrees to work together with Medicare to give patients the best possible care.
How are ACOs incentivized to improve quality care?
Payment to ACOs To promote improved quality of care, CMS is introducing new financial incentives that reward the delivery of high-quality care and the management of patient costs. 2 To achieve this, collaboration among providers will be necessary to leverage resources and reduce unnecessary and duplicative procedures.
Are ACOs mandatory?
But there are some critical differences – notably, an ACO patient is not required to stay in the network.
What is an ACO in Medicare?
Under the proposed rule, an ACO refers to a group of providers and suppliers of services (e.g., hospitals, physicians, and others involved in patient care) that will work together to coordinate care for the patients they serve in Original Medicare. The goal of an ACO is to deliver seamless, high-quality care for Medicare beneficiaries, ...
How does CMS work with ACOs?
CMS has worked closely with agencies across the Federal government to facilitate participation in the Shared Savings Program by coordinating federal fraud and abuse requirements, tax guidance, and antitrust considerations. In particular, the Federal Trade Commission and the Antitrust Division of the Department of Justice have proposed an antitrust policy statement that clarifies application of the antitrust laws to Medicare Shared Savings Program -approved ACOs that negotiate and contract with commercial payers. See: Medicare Fact Sheet: Federal agencies address legal issues regarding Accountable Care Organizations
How do ACOs share savings?
To qualify for shared savings, ACOs must meet certain quality and performance standards and have total per capita costs for assigned beneficiaries in the performance year to be both below the estimated updated benchmark and above the minimum savings rate. Once the ACO surpasses the minimum savings rate, it may share in savings if it is eligible to receive shared savings based on its quality performance score. To provide a greater incentive for ACOs to adopt the two-sided risk approach, the maximum sharing percentage is 60 percent for ACOs in the two-sided model compared to 50 percent in the one-sided model. In addition, under the two-sided model, ACOs would receive shared savings for the first dollar after the minimum savings rate is achieved. In contrast, under the one-sided model, ACOs would share on savings after a 2 percent threshold is met, with an exemption for small ACOs in rural or underserved communities. Under both models, an ACO would be eligible for a greater portion of shared savings the higher its quality and performance score.
What would happen if an ACO met quality standards and achieved savings exceeding the minimum saving rate?
If an ACO meets quality standards and achieves savings exceeding the minimum saving rate, the ACO would share in savings, based on the quality score of the ACO. The proposed rule would provide for additional shared savings for ACOs that include beneficiaries who receive services from a Federally Qualified Health Center or Rural Health Clinic during the performance year.
How long is the comment period for ACO?
There will be a 60 day public comment period on this proposed rule. CMS encourages all interested members of the public, including providers, suppliers, and Medicare beneficiaries to submit comments so that CMS can consider them as it develops final regulations on the program.
How to participate in the Shared Savings Program?
To participate in the Shared Savings Program, providers must form or join an Accountable Care Organization (ACO) and apply to CMS. An existing ACO will not be automatically accepted into the Shared Savings Program. If accepted, they would serve at least 5,000 Medicare patients and agree to participate in the program for three years.
What is the maximum rate of sharing for ACOs?
ACOs would be eligible for the maximum sharing rate (60 percent for the two-sided model and 50 percent for the one-sided model) if the ACO generates sufficient savings and successfully reports the required quality measures. This flexibility would allow newly formed ACOs a grace period as they start up their operations and learn to work together to better coordinate patient care.
How many primary care providers are there in an ACO?
Each year, Medicare fee-for-service beneficiaries see, on average, 2 primary care providers and 5 specialists across 4 sites of care.26Hence, a primary care physician who treats 257 Medicare patients would need to interact with up to 229 physicians, practicing in 117 care sites.26Patients who have multiple chronic conditions use even more providers and have a lower percentage of visits to their assigned primary care physicians than do other patients. Approximately 20% of Medicare beneficiaries who have at least 5 chronic conditions usually seek care from specialists and refer themselves to these experts.26
Why are ACOs important?
ACOs are designed to give incentives to physicians and hospitals to decrease costs by sharing in the cost-savings; however, providers risk being penalized if they do not decrease costs or do not meet certain quality standards.
How successful are ACOs?
Early results for ACOs are mixed. A 2014 study demonstrated that ACO-style care had more success than traditional care in reducing avoidable hospital admissions and shortening hospital stays.28ACOs also have superior numbers for other indications of efficiency. Specifically, ACOs had a 6.3% reduction in hospital readmissions and a 3.9% reduction in length of stay, whereas traditional models had reductions of 3.8% in readmissions and 2.4% in length of stay.29However, some experts argue that some readmissions reflect better quality, in particular after surgery and in cancer care.30
How does Medicare penalize hospitals?
Medicare penalizes hospitals for high readmission rates. Thus, ACOs have been concentrating on reducing readmissions. Such reduction efforts focus on educating patients who are most likely to return to the hospital. The primary strategy is to make patients partners in their own care. Such a strategy can save substantial resources. For example, on average, a readmission in Wisconsin hospitals costs $9600.46Wisconsin hospitals have successfully reduced readmissions by 22%, exceeding CMS's goal of 20%. As a result of these actions, 63% of Wisconsin hospitals will not face readmission penalties, and no hospital in the state will be penalized more than 1%.47
How much does it cost to start an ACO?
ACOs are associated with considerable start-up costs. Tom Scully, former CMS Administrator, estimates startup costs to be at least $30 million in a midsized market.17The estimated cost of starting and operating a physician ACO in the first year was more than the CMS estimate of $1.8 million.18The current CMS rules for Medicare ACOs provide too much risk and too little reward. In 2014, 90% of surveyed ACOs were concerned about return on investment, compared with only 14% in 2013.19So, even if physicians are in a 1-sided ACO that does not penalize them for not meeting established standards, they still risk not getting a return on their start-up investment. Moreover, a considerable amount of time may elapse before costs actually decrease, making it difficult to obtain rapid return on an ACO investment.
How does ACO work?
Unlike HMOs, ACOs are designed to increase quality of care without limiting patients' choices. With the possible exception of a hospital ACO, Medicare beneficiaries can obtain care from any provider that accepts Medicare. Therefore, Medicare patients have few incentives to use the most effective provider. To be successful, ACOs need to change patients' behavior through incentives. Much has been written about price transparencies that make consumers aware of the price being charged for services, but price transparency may lead to even higher costs, because consumers may perceive that a higher price indicates superior quality.21,22
What is the issue with healthcare?
A major issue is whether the United States is getting its money's worth. The costs of many healthcare procedures are much greater than the benefits, and some procedures provide little or no benefit to patients. For example, Ezekiel Emanuel argues that there may be overemphasis on extending life rather than improving the quality of life.4As quoted by Donald Berwick, Michael Porter and Elizabeth Teisberg assert that “value is added by care that produces the best outcomes at the lowest cost over time.”5,6Moreover, the present healthcare system is fragmented, especially in terms of patient care coordination. Many patients see various types of physicians, but there is little communication among the providers. More than 10 years ago, in Crossing the Quality Chasm, the Institute of Medicine stated, “In its current form, habits, and environment, American health care is incapable of providing the public with the quality of care it expects and deserves.”7
How did the Affordable Care Act change healthcare?
To achieve these goals, the Affordable Care Act significantly changed the way healthcare is offered and how healthcare providers are reimbursed. While the primary purpose of the Affordable Care Act is to provide all Americans with access to affordable health insurance, various components will potentially have a significant impact on how physicians are compensated for providing care. The traditional fee-for-service system is slowly being replaced by a variety of managed care initiatives. The Affordable Care Act proposes to further reform of the health care service-delivery system through the establishment of Accountable Care Organization and the Bundled Care Payment Initiative through the Medicare program. The implementation of both the Affordable Care Organization and Bundled Care Payment Initiative seeks to incentivize and facilitate integrated, coordinated medical care. Affordable Care Organization initiatives try to achieve this through organizational structure reforms, while the bundled payment initiative looks to do so with payment reforms.
What is ACO in healthcare?
The term ACO was originally coined by researchers and policy experts to describe entities that consist of responsibly integrated healthcare providers that all are working toward achieving a common clinical goal and outcome: efficient, high quality, patient care while utilizing a common clinical pathway that incoporates principles of treament and therapeutic modalities in a multifaceted provider setting . [3]
What are the challenges of a primary care physician?
Significant challenges face primary-care physicians who join an Affordable Care Organization via a group practice, hospital-medical practice alignment, or another joint venture such as an independent practice association. Physician groups need a robust Electronic Health Record system with advanced reporting, disease registries, and patient population care management. Organizations that achieve Patient-Centered Medical Home accreditation have mastered these functions and are further along the road to meeting Affordable Care Organization metrics.
What is Medicare Shared Savings Program?
The Medicare Shared Savings Program allows a variety of providers, including post-acute care provider, who voluntarily agrees to coordinate care for patients. They must, however, meet certain quality metrics to share in any savings they achieve. Those Affordable Care Organizations that elect to share losses have the opportunity to also share in greater savings. The success of each Affordable Care Organization is determined by approximately 30 quality measures organized into four domains. These domains include patient experience, care coordination, safety, and preventive health in at-risk populations. The higher the quality of care providers deliver, the more shared savings their Affordable Care Organization can earn, as long as they also lower growth in health care expenditures.
What is NCBI bookshelf?
NCBI Bookshelf. A service of the National Library of Medicine, National Institutes of Health.
What Is an Accountable Care Organization?
Accountable care organizations were established by the Affordable Care Act to improve high-quality care for Medicare beneficiaries while reducing costs to the Medicare program.
Is an Accountable Care Organization Right for You?
If you receive health care through a Medicare accountable care organization, your doctor will likely refer you to hospitals or specialists within the same ACO.
How to Join an Accountable Care Organization
You can’t enroll in an ACO — they are networks that your doctor would have voluntarily joined. If your doctor is part of an ACO, he or she will tell you. Your doctor should also be able to explain what it means for you and your care.
Accountable Health Care Communities Model
In addition to ACOs, CMS introduced the Accountable Health Communities Model . Though there are just over 30 of these unique organizations nationwide, they address an important aspect of integrated care—social determinants of health (SDOH).
Why Partner with an ACO?
Older adults are the predominant population of Medicare beneficiaries. They are also among the nation’s most vulnerable and costly populations affected by chronic disease. As such, many ACOs are seeking opportunities to provide prevention and wellness services to improve the management of their patients’ chronic conditions.
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