Considering Participating in an ACO?

May 28, 2015 by Antonio Arias, MBA, CHBME

Topics: Medical Billing, Revenue Cycle Management, Practice Management

As a medical billing company we are seeing the health care industry evolve, value-based care is becoming increasingly important to the governmental powers that be. But it matters to practices, too! If delivering enhanced, collaborative care to your patients is a growing priority for your practice, you may be captivated by the opportunity to participate in one of the most successful initiatives in the value-based care movement: the ACO, or Accountable Care Organization.


What’s an ACO?...The Centers for Medicare & Medicaid Services (CMS) define ACOs as groups of doctors, hospitals, and other health care providers who come together voluntarily to give coordinated, high-quality care to their patients. The goal of this approach is to ensure that patients, especially the chronically ill, get the right care at the right time without enduring medical errors or duplicative treatments, visits, and services.

The Affordable Care Act encourages providers to form ACO networks in order to become eligible for bonuses for delivering care more efficiently. Most ACO discussions center around Medicare, which offers a program in which providers make more money if they keep their patients healthy.

The program has yet to reach critical mass, but it is proving popular: In 2014, 428 provider groups had signed up, and 14 percent of the U.S. population was served by an ACO. Like many Affordable Care initiatives, however, there are a lot of considerations to keep in mind about potentially participating. A non-exhaustive list of must-know ACO info is rounded up here to help you decide what’s best for your practice.

Saving Money is the Key: So how exactly are practices incentivized in the ACO model? ACOs that effectively work together to lower the costs of care – while simultaneously meeting designated care quality standards – benefit by pocketing a portion of the savings. If they don’t meet performance and savings benchmarks, however, they can be stuck paying penalties.

Population + Time: If you’re in a rural area or small town, you’ll need to look well beyond your community’s borders for potential ACO partners. An ACO has to manage the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years.

No Set Framework: ACOs can be structured in many different ways and can include a variety of different stakeholders – ranging from hospitals to insurers to private companies – as long as they include primary care physicians. Within an ACO, the entity that spurred the creation of the network typically oversees the group as a whole.

As For Payment…: A major key to the ACO model is instilling a sense of shared responsibility for the cost and quality of care among the entire network. As such, manners of payment are typically non-traditional, though they can take any variety of forms. Some ACOs operate by delivering members equal shares of overall revenue, while others pay by salary, capitation, or productivity-based compensation.

‘Selling In’ is An Option: Many large hospitals are buying physician practices to form their own ACOs. If you’re approached to sell, get all of the necessary information and make sure that collaborative, value-based care is truly a priority for the organization interested in acquiring you. (That means watch out for signs that the entity is just looking to expand its referral base for specialty and hospital services.)

New Options are En Route: The CMS has announced plans to launch a ‘next generation’ ACO model to expand what ACO members can do – for example, having lower or no co-pays for highly important patient visits or serving up to 10,000 patients under one ACO. CMS will accept ACOs into the ‘Next Generation ACO Model’ through two rounds of applications this year and in 2016.

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