What you Need to Know About a Career in an ACO | Mar 27, 2017

Public-health officials have the ability to operate in a variety of environments over the course of their careers. At the end of the day, providing quality care and finding solutions to community problems is – and always should be – the goal, regardless of the setting.

Over time, employees in this industry have developed a new type of group that aims to focus on quality over quantity in its services. Let’s take a closer look at accountable care organizations and what healthcare providers should know:

What are ACOs?

Accountable care organizations bring together numerous medical professionals and facilities to give coordinated, high-quality care to patients, according to the Centers for Medicare & Medicaid Services. There are some ACOs that are tied specifically to Medicare and others that are more generally associated with regular health care services. Those who participate in this caregiving option voluntarily agree to be held accountable to patients and third-party payers for the value, suitability and efficiency of their work.

First mentioned in a Medicare Payment Advisory Commission discussion, ACOs resemble the Health Maintenance Organizations (HMOs) that came about in the 1970s. Added to the language of the Affordable Care Act, they were included as a way to approach the national deficit. The objective of these groups was to reduce delivery of unneeded medical care and improve health outcomes, thus cutting costs for patients and placing it on providers themselves. As of January 2016, there were 838 active ACOs across the country, according to a study by Leavitt Partners in partnership with the Accountable Care Learning Collaborative.

The breakdown for healthcare providers

ACOs can seem complicated due to the language surrounding the groups. To simplify the idea, healthcare providers should look at it this way: Providers will make more money by keeping their patients healthy.

The ability for hospitals and medical professionals to link up is not a new idea, but the shared responsibility element is a more novel arrangement. The key is coordinated care which aims to limit unnecessary medical spending. In the fee-for-service system, doctors and physicians were compensated for each test and procedure they carry out, which can increase costs for patients and gives healthcare providers the go-ahead to order medical actions that aren’t needed.

As Kaiser Health News explained, ACOs don’t eradicate the fee-for-service platform. Instead, these groupings give healthcare providers better incentives for improving efficiency and lowering costs. In short, keeping people out of the hospital or other medical facilities results in higher disbursement for medical professionals participating in ACOs.

If ACOs do not meet predetermined quality standards or are unable to save money, they may have to pay a penalty or be left to invest their own funds to make improvements to the care they offer.

It’s not uncommon for patients to be relatively unaware of ACOs and their purpose, even if individuals are referred to these networks through other doctors or hospitals. As a result, providers who are part of these groups are required to alert people to their existence. Patients can then choose to opt-out or participate.

A focus on information sharing

In an effort to improve patient care, medical professionals have claimed they need to enhance the amount of patient data and history they have access to. Instead of simply going off what individuals may be able to remember, health care providers have called for better information sharing between their colleagues. ACOs assist in this task, as these groups can request Medicare claims materials from the Centers for Medicare & Medicaid Services to better inform doctors and physicians.

Once again, patients can opt-out of this action, but the data is extremely beneficial to medical professionals looking to reduce costs, increase efficiency and meet predetermined standards.

The basis of ACOs

Starting an ACO is not an easy feat, but providers can start their education on the subject by understanding the structural options they can choose from. The American Academy of Physicians lists the following examples as a strong starting point for the creation of these collaborative groups:

  • Independent practice associations: A group of physician practices that contractually agree to work together to offer health care for patients in a health plan network or integrated system. These can be the basis for a physician-sponsored ACO.
  • Clinically integrated networks: An arrangement – normally sponsored by an IPA or hospital – led by physicians who aim to gather the resources necessary for effective care management for defined patient populations.
  • Virtual groups: Group practices and individual physicians join forces for a predetermined amount of time, usually a performance period, under this system.

In addition to these choices, medical professionals can also jump start an ACO by joining a physician-hospital organization, which is a jointly owned entity under physician and hospital leadership, according to the American Health Lawyers Association.

The allowance of alternate payment

In January 2015, the U.S. Department of Health and Human Services made an important announcement regarding the future of healthcare payments. The organization aims to shift away from fee-for-service payments toward value-based pay. This means that medical professionals will be compensated based on the quality of their services, not the volume. The HHS implemented a timeline that called for 30 percent of Medicare payments to be based on outcomes starting in 2016. By 2018, that figure would rise to 50 percent.

To ensure the intentions of this proposal were carried out in a streamlined and effective way, the HHS created the Health Care Payment Learning and Action Network. This organization was designed to enhance alternative payment models into the programs of private payers, employers, providers, states and state Medicaid programs and more.

For ACOs, there are several disbursement methods in play, including the following, according to Becker’s Hospital Review:

  • One-sided shared savings: Providers can share a portion of the saving achieved via a modified fee-for-service model and will avoid any financial losses.
  • Two-sided sharing savings: This approach incentivizes providers to reduce costs as healthcare professionals are part of both the upside and the downside of fee-for-service arrangements.
  • Bundled or episode payments: This arrangement presents the most risk for providers if the cost of treatment exceeds the payment. In bundled or episode payments, medical employees get a single disbursement for all of one patient’s services for one episode of care.
  • Partial capitation/global payments: In this scenario, the ACO accepts partial risk for some or all of physician’s’ services, but not for hospital or other non-physician services.
  • Global payments: Providers get monthly or annual payments, no matter the services they perform in that time frame. This arrangement encourages healthcare professionals to lower the expenses tied to care to gain access to a higher payout.

It is crucial for all members of an ACO, especially healthcare providers to be aware of the financial risk that comes with the payment arrangement in place. There are pros and cons to each model, but each party within these groups need to weigh their options before agreeing to a system with the potential to result in additional expenses.

Benchmarks for 2017

The disbursement ACOs and their members receive depends on the group’s ability to meet certain quality measures and benchmarks. As the shift from fee-for-service to value-based pay continues, these standards are subject to change and can vary on a yearly basis.

For example, there were 34 quality measures for the 2016 reporting year. In 2017, the CMS will calculate value of care by examining 31 measures in the following four key domains:

  1. Patient/Caregiver Experience (8 measures)
  2. Care Coordination/Patient Safety (10 measures)
  3. Clinical Care for At-Risk Population: Specifically looking at diabetes (2 measures scored as 1 composite measure), hypertension (1 measure), ischemic vascular disease (1 measure) and depression (1 measure)
  4. Preventative Health (8 measures)

Each domain encompasses a number of measures outlined above, which are essentially subsections by which the CMS bases their official calculations. For instance, categories under the first domain, Patient/Caregiver Experience, include elements such as access to specialists, health promotion and education, provider communication and stewardship of patient resources, among others.

The results of the documentation submitted by ACOs and gathered by the CMS will determine the amount of the payment members of these groups receive. Those who earn a poor score may be required to invest additional funds into making their organizations more efficient and effective.

The public health effect

While the medical professionals included in ACOs are usually doctors and physicians, these groups do draw members of other related fields to their work. Public health officials may find themselves as an influence to the quality of care patients receive through these organizations as health education and promotion is an important and measurable element for ACO reporting.

As more healthcare providers are pushed toward value-based care, so too will those working in public health. Earning a master’s degree in this field can help employees understand the direction in which the industry is moving. With this higher level of education and training, these workers can implement strategies to improve quality of their services and work hand-in-hand with ACOs to provide more comprehensive health care assistance.