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Can an ACO Benefit Independent Physicians?

February 21, 2018 BY Alanna Moriarty

Can an ACO Benefit Independent Physicians?

The Congressional budget deal passed earlier this month includes changes to the Medicare Shared Savings Program (MSSP), impacting ACOs participating in the initiative. One of the most prominent changes to the MSSP is the establishment of the ACO Beneficiary Incentive Program, which allows ACOs to pay patients up to $20 for making appointments with their primary care physician—much like the existing Coordinated Care Reward Program. The Beneficiary Incentive Program will also enable beneficiaries to select an ACO-affiliated physician as their primary care provider. Industry experts hope these changes will encourage beneficiaries to be more proactive and engaged in their own care.

An Accountable Care Organization (ACO) is a voluntary association of healthcare providers that bases physician reimbursement on performance quality and outcome in order to lower overall costs. This method incentivizes physicians to deliver higher-quality care at an affordable cost, and is replacing the traditional fee-for-service model that has dominated healthcare in the past.

Top Medicare Next Generation ACOs by Expenditures

ACO Name

Total MSSP Benchmark Expenditures (M)

ACO Start Date

UT Southwestern Accountable Care Network

$1,014

2014 Q1

Iowa Health Accountable Care LC 

$813

2012 Q3

Indiana University Health ACO

$527

2012 Q3

Doctors Connected

$445

2013 Q1

Pioneer Valley Accountable Care

$372

2016 Q1

Triad Healthcare Network ACO

$316

2016 Q1

Arizona Care Network

$286

2013 Q1

St Lukes Clinic Coordinated Care Ltd

$252

2013 Q1

KentuckyOne Health Partners  LLC

$214

2013 Q1

Cornerstone Health Enablement Strategic Solutions

$209

2016 Q1

Fig 1 Data from Definitive Healthcare’s most recent product update. New data includes financial and quality metrics for ACOs participating in the CMS Next Generation ACO Model.

Under the Coordinated Care Reward program, patients receiving care from Next Generation ACOs are eligible for payments of up to $25 by going to an annual wellness visit. The primary difference between the Coordinated Care Reward Program and the new Beneficiary Incentive Program is that patients are paid by the Centers for Medicare and Medicaid Services (CMS) in the former, and by individual ACOs in the latter. Some experts believe that ACO-funded payments could be a barrier to participation. However, by selecting a primary care physician from within an ACO, beneficiaries could see enhanced care coordination and improved care outcomes. ACOs participating in the Beneficiary Incentive Program will also be able to better understand their patient populations before the performance year begins—offering greater opportunities to engage with beneficiaries on various wellness and prevention programs.

Initiatives like the Beneficiary Incentive Program could also benefit independent physicians participating in an ACO. According to the American Medical Association, only 47.1 percent of physicians practice independently—the first time in U.S. history that less than half of doctors are independent. This trend is primarily attributed to the rising costs associated with independent practice, particularly surrounding technology implementation and maintenance, as well as other resources that comply with quality payment programs.

Participation in an ACO allows independent physicians to benefit from value-based initiatives like those outlined in the Medicare Access and CHIP Reauthorization Act (MACRA). ACOs heavily invest in new and efficient technologies, compile performance and quality data, and complete CMS reporting requirements on behalf of participants, which reduces the workload of independent physicians.

Top Medicare ACOs by Number of Physicians

ACO Name

Total MSSP Benchmark Expenditures (M)

ACO Start Date

Ascension Care Management (FKA MissionPoint Health Partners ACO)

7,900

2012 Q3

Physician Organization of Michigan ACO

5,700

2013 Q1

Advocate Physician Partners Accountable Care

3,900

2012 Q3

Baylor Scott & White Quality Alliance

3,800

2015 Q1

Cleveland Clinic Medicare ACO

2,800

2015 Q1

Mount Sinai Care

2,249

2012 Q3

Mercy ACO

2,100

2013 Q1

OneCare Vermont Accountable Care Organization

2,029

2013 Q1

Indiana University Health ACO

1,837

2012 Q3

University Hospitals Coordinated Care Organization

1,770

2012 Q3

Fig 2 Data from Definitive Healthcare’s most recent product update. New data includes financial and quality metrics for ACOs participating in the CMS Next Generation ACO Model.

Health systems also benefit when independent physicians participate in an ACO. Hospitals and health systems are able to expand their patient populations without directly employing physicians, which saves money. Independent physicians are able to refer patients to local hospitals and other facilities within a health system because they’re in the same network. Because all these providers participate in the same ACO, they are able to partner rather than directly employ or be employed—benefitting both parties. According to CMS, approximately 58 percent of Medicare ACOs in 2018 include both physicians and hospitals.

Definitive Healthcare’s most recent product update will go live this week, and includes updated financial and quality data for End Stage Renal Disease (ESRD) and Next Generation (NextGen) ACOs. The update also includes full-year ICD-10 claims data, Comprehensive Joint Replacement (CJR) payment data, and much more. 

Visit the Definitive Blog to read more about the Role of ACOs in Purchasing and Population Health.

For more information on relationships between providers, care facilities, purchasing organizations, and more, visit our Hospital Affiliations page.