An Accountable Care Organization (ACO) is a voluntary coalition of healthcare providers characterized by a care delivery and reimbursement model tying provider payments to quality metrics and patient care outcomes. The goal of the ACO model is to reduce total care costs for a specific patient population. Each ACO has a defined patient population for which it is held accountable in terms of care cost and quality. Patient populations are primarily comprised of Medicare beneficiaries.
All but one of the top 10 ACOs with the largest patient populations are commercial ACOs--the exception is one Medicare Next Generation ACO. Commercial ACOs are reimbursed by commercial payers or self-insured employers and do not have public reporting requirements, unlike those associated with the Centers for Medicare and Medicaid Services (CMS). A Leavitt Partners analysis found that commercial ACOs covered more than 17 million lives as of April 2016, more than twice that covered by Medicare and Medicaid ACOs. Many Commercial ACOs emulate the Medicare Shared Savings Program (MSSP) model, reimbursing provider services and comparing the total costs to a benchmark every year.
Top 10 ACOs by Patient Population
|ACO Name||Patient Population||ACO Type|
|TMA PracticeEdge||5,000,000||Commercial ACO|
|Texas Health Resources ACO||1,600,000||Commercial ACO|
|Childrens Hospital of Philadelphia (CHOP) ACO||1,400,000||Commercial ACO|
|Delaware Valley ACO||1,400,000||Commercial ACO|
|Steward Integrated Care Network||1,000,000||Medicare Next Generation ACO|
|Carilion Clinic ACO||1,000,000||Commercial ACO|
|Heritage Medical Group ACO||700,000||Commercial ACO|
|Healthcare Partners ACO||675,000||Commercial ACO|
|Riverside Health System ACO||500,000||Commercial ACO|
|Partners in Care ACO||500,000||Commercial ACO|
Fig 1 Data from Definitive Healthcare based on ACO self-reporting and CMS Programs. The Definitive Healthcare database tracks financial and performance metrics on over 1,500 ACOs.
To succeed in a commercial ACO, providers must be able to manage value-based reimbursement, which relies heavily on new technology, a smooth administrative process, and a culture shift in the participating care facility. ACO participants are required to understand the patient experience across the entire healthcare continuum, which can mean investing in a hospital's physician network to ensure optimal control over patient care. Once facilities opt to join an ACO, the organization as a whole has the option to participate in various care improvement and value-based programs, such as the MSSP.
The MSSP was announced in 2010 as an incentive for providers to collaborate on improving patient care coordination and reducing care costs. Under the Shared Savings Program, participating ACOs can choose from four different "tracks," each with unique requirements and rewards. The primary issue with this method is that the vast majority of ACOs choose Track 1, which absolves participants from risk and does not require them to repay Medicare for overspending. However, while ACOs are not penalized for overspending, they are also unable to collect bonus payments in the form of generated shared savings.
In addition to care facilities and payers, independent physicians are also able to participate in the MSSP. This allows independent practitioners to benefit from value-based CMS initiatives, empowering them to invest in new technologies, aggregate performance and quality data, and more easily complete CMS reporting requirements. Participation in an ACO minimizes the workload of independent physicians, enabling them to spend more time seeing patients and less time logging data. Health systems and local hospitals also benefit when independent physicians participate in an ACO. Solo practitioners are more likely to refer patients to hospitals and health systems in the same ACO, expanding their patient population without hiring additional care providers and saving a hospital or health system money.
Top 10 MSSP ACOs by Total MSSP Expenditures
|ACO Name||Total MSSP Expenditures (M)||Patient Population|
|Advocate Physician Partners Accountable Care||$1,493||139,617|
|Delaware Valley ACO||$1,376||123,888|
|Physicians Accountable Care Solutions||$1,143||115,415|
|Physician Organization of Michigan ACO||$1,000||104,559|
|Southwestern Health Resources Accountable Care Network||$977||87,479|
|Iowa Health Accountable Care LC||$823||92,589|
|Mercy Health ACO||$816||82,614|
|Genesis Healthcare ACO||$784||15,787|
|Illinois Health Partners ACO||$745||81,093|
Fig 2 Data from Definitive Healthcare based on CMS reports.
Experts acknowledge that the shift from fee-for-service to value-based care is the future of medicine and care delivery. The challenge is how to implement these changes quickly and effectively, without compromising care coordination or patient experience. Because commercial ACOs do not have public reporting requirements, it is difficult to gather the data required to assess industry progress. This industry-wide movement toward value-based care means physicians must adapt to new methods of care delivery and reporting, which could mean greater opportunities for strong physician leaders. Physician workflow is increasingly data-oriented, leading to a heavy reliance on electronic health record (EHR) systems. This can be frustrating for physicians, as they are often forced to spend less time meeting with patients in-person, and more time logging the details of the patient visits. Physicians who are most easily able to adapt their workflows can pave the way for others in their facility and ACO.
Definitive Healthcare is the leading provider of data across the healthcare continuum. Clients have access to proprietary intelligence on over 8,800 hospitals & IDNs, 1.6 million physicians & allied healthcare professionals, 40,000 clinics, and much more. Start your free trial today!