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 two of the 10 top 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
TMA PracticeEdge (Texas Medical Association - Blue Cross and Blue Shield of Texas ACO)
Aetna - Childrens Hospital of Philadelphia (CHOP) ACO
Aetna - Carilion Clinic ACO
Steward Integrated Care Network
Medicare Next Generation ACO
Tampa Bay Health Alliance
Capital Bluecross - Heritage Medical Group ACO
Anthem Blue Cross of California - Healthcare Partners ACO
Aetna - Riverside Health System ACO
Horizon Blue Cross Blue Shield of New Jersey - Partners in Care ACO
Aetna - Virtual Medical Group 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. Previously under the Shared Savings Program, participating ACOs could choose from four different "tracks," each with unique requirements and rewards. The primary issue with this method was that the vast majority of ACOs chose Track 1, which absolved 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.
Starting in July 2019, the former track options are no longer available and participants will have the ability to select between "BASIC" and "ENHANCED" five-year track options. CMS will utilize a combination of factors to determine an ACO's participation option including past experience in performance based CMS programs as well as revenue.
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, expandi g their patient population without hiring additional care providers and saving a hospital or health system money.
Top 10 MSSP ACOs by Total MSSP Expenditures
Total MSSP Expenditures
Advocate Physician Partners Accountable Care
Physician Organization of Michigan ACO
Baylor Scott & White Quality Alliance
Health Connect Partners
Delaware Valley ACO
Southwestern Health Resources Accountable Care Network
Mercy Health ACO
Privia Quality Network (AKA Privia Health)
Cleveland Clinic Medicare ACO
Illinois Health Partners ACO
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.
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