Thinking of Joining an ACO? 5 Things You Need to Know

October 11, 2016 by Antonio Arias, MBA, CHBME

Topics: Practice Management, Medical Billing Company

Over the last few years, accountable care organizations or “ACOs” have taken off throughout the U.S. As of the end of January 2016, Leavitt Partners had identified 838 active ACOs with service in all 50 states and the District of Columbia… which means no matter your geographic location, joining an ACO is an option available to your practice.

Broadly, an ACO is a group of providers (hospitals, practices, and/or other healthcare systems) that agree to work together toward collectively improving the quality of care they deliver to patients, while at the same time working to reduce patients’ overall healthcare costs. Under government initiatives such as the Medicare Shared Savings Program, ACO participants that meet various quality and cost-savings objectives can share in the cost savings achieved overall – making it the first care delivery model that allows physicians to see tangible financial benefits from provided well-coordinated care to their patients.

But there’s a lot more to ACO participation than just the potential benefit. As such, physicians are wise to consider all of the below must-know info before signing their practices up as ACO participants.

It Can Be a Risk-Reward Scenario. Under many programs, providers also share in the losses when their ACO fails to meet measured objectives. In the Medicare program mentioned above, participants can select whether to get involved via a one-sided risk model (sharing in 50 percent of cost savings realized when caring for Medicare patients) or a two-sided risk model (sharing in 60 percent of cost savings and/or losses). Before making your practice vulnerable to a financial hit via the two-sided approach, consider how well your bottom line can bear the impact.

Your Payment Model Will Partly Change. With their focus more on shared savings and global fees, joining an ACO is akin to moving one step away from the fee-for-service model, so practices should prepare to adjust their approach to medical billing. But it’s also akin to planning for the future: The entire U.S. healthcare system is increasingly moving away from patient-volume to patient-value, so an ACO can make for a great training ground.

You Won’t Practice in a Vacuum Anymore. Coordinated care under the ACO model requires practices to enter into new partnerships, and that can be uncomfortable for some physicians. For example, doctors are essentially incentivized to share referrals within the organization – which can feel like abandoning other relationships with a provider’s other commonly referred colleagues. Be careful what partners you plant your flag with as they’ll be crucial to your success or failure with the ACO at large.

Timing is Everything. There’s a flip-side to the referral situation, as well: If tons of other practices in your area partner up with an ACO but you choose not to, you could be cut out of that ACOs referral network and ultimately lose a portion of your patient base. Be careful how long you hold out, because you could get left hanging (and face bad business consequences).

The Governance Matters. The leadership and governance of your ACO will dictate the structure of the organization as well as how resources, and patients, are allocated among participating practices. Make sure you’re comfortable with the people and program management, and be certain to carve out a means to have your voice heard in organization-wide discussions.

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