American Osteopathic Association

Advancing the distinctive philosophy and practice of osteopathic medicine

Accountable Care Organizations

An accountable care organization (ACO) is a network of doctors and hospitals that share the responsibility for providing care to patients. ACOs can be organized in a number of different ways and often differ from community to community. For example, ACOs may:

  • Serve both public and private sectors; they might serve Medicare patients as well as commercial populations.

  • Be organized by hospitals that are retaining primary care practices or already have an independent physician association (IPA)

  • Be organized by insurance carriers

  • Be led by freestanding small and medium sized primary care physician practices or group practices that are banding together to share care coordinator nurses and other services.

Better care, lower costs 

The key is for primary care physicians to coordinate care that results in better outcomes for patients at a reduced cost. Physicians are often paid on a fee-for-service basis and receive a percentage of money saved and a bonus for meeting quality metrics. However, in the future the fee-for-service payment model will likely transition into global case rates, capitation or a salary model with quality metrics as the mainstay. Primary care physicians and osteopathic primary care physicians in particular, are well-positioned to succeed in ACO models because they had the advantage of being trained in a whole-person orientation. 

Why do we need ACOs?

As the national deficit continues to grow, the Medicare program has been a prime target. Aging baby boomers will add to the deficit when they retire in coming years. The Congressional Budget Office estimates that ACOs could save at least $4.9 billion through 2019

The hope is that ACOs will meet what has been called “the triple aim:” improve the health of the population, improve the individual patient experience, and reduce the total cost of care. ACOs would do this by:

  • Making physicians and other providers accountable for the care of their patients

  • Providing strong incentives to encourage preventive care

  • Saving money though reducing unnecessary hospitalizations, tests and procedures. 

Are ACOs only for primary care physicians?

No, ACOs include the full spectrum of patient care: primary care physicians, surgeons, specialists, nursing home and hospital care. Some oncology practices are forming an ACO, however, the majority utilize primary care physicians as the core.

How are ACOs related to patient-centered medical homes?

Advanced coordinated care is the foundation of ACOs and the patient-centered medical home (PCMH) model encompasses coordinated care. Because the AOA recognizes the importance of the PCMH, it was a founding member of the Primary Care Patient Centered Collaborative, a multi-stakeholder organization that works to advance the medical home and medical neighborhood, i.e. the inclusion of specialists in the medical home. Medical homes are the foundation of accountable care, whether the ACO model is initiated by insurance carriers, hospitals or by primary care physicians.

How do ACOs differ from HMOs?

While many are skeptical that ACOs are really HMOs in disguise, others point out some fundamental differences. These include:

  • ACOs don’t ‘lock in’ patients; participation is voluntary and patients can choose their own physician. 

  • There are no gatekeepers or pre-authorizations. ACOs aren’t about rationing or withholding care; they are focused on coordinating patient care. 

  • Electronic medical records allow physicians to mine their practices’ data to perform ‘population health’ by determining who in their practice is due for necessary tests and visits. Medicare and private sector carriers understand the importance that patient data plays in order for the physician to track and monitor their patients. 

  • ACOs may offer an array of different payment models – fee for service or global case rates, not just capitation.

What should I ask before getting involved with an ACO?

Before osteopathic physicians consider affiliating with an ACO, it’s important to ask as many questions as possible to avoid surprises down the road. According to a Dec. 17, 2011 blog post by Madeline Hyden, MGMA content editor, you should find out what care guidelines doctors have to follow and what quality measures you will be expected to track and report. Some questions to consider:

  • Will your office be required to provide same-day appointments or access to physicians outside of usual business hours? 

  • Is an electronic medical record system required? If you already have one, will you be required to replace it so that it communicates with other practices and hospitals in the ACO? 

  • Will the ACO provide enough money for effective care coordination? 

  • What are the savings targets and are they achievable? 

  • How will your bonus be calculated and what are the downside risks?

  • If the ACO is insurance carrier-led, what data will be provided and when? 

  • Will data be provided in a timely fashion so that you can manage your patients? 

  • Will you be required to pursue PCMH recognition and if so, what level, through which recognition organization, and who will front the expense?


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