What You Should Know About Accountable Care Organizations

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An Early Standard For ACOs?

You have likely heard of the Pioneer accountable care organization. The CMS chose Pioneer ACOs based on the infrastructure already in place that the CMS deemed closely related to an ACO model. This was an early “testing” phase for the Medicare Shared Savings Program ACO. Pioneer ACOs are subject to different shared savings methodology. There are 32 Pioneer ACOs throughout the country.

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Author(s): 
Beth A. Kase, JD

   The CMS also established maximum percentage savings. In the one-sided model, the ACO can share up to 50 percent of savings while the two-sided model enables ACOs to share up to 60 percent of savings. The purpose of these boundaries is to protect the CMS from paying bonuses to ACOs for random, statistical fluctuations that are unrelated to ACO activities while also encouraging participation and investment in the program.

   An ACO must have clear criteria by which it will distribute possible shared savings among participants and how it will use shared savings to improve care for beneficiaries and decrease beneficiary spending. Conversely, an ACO that is subject to shared losses must have a mechanism for payment of its share of losses. The CMS will make shared savings payments directly to the ACO, not to the individual providers. To reiterate, providers and suppliers in the ACO will still receive traditional Medicare fee-for-service payments for their services.

   Accountable care organizations have the opportunity to decide how to distribute shared savings among participants with agreements that encourage participants to adhere to quality and program measurements. A plan for distribution is part of the ACO’s application process that must be approved by the CMS. An ACO’s distribution of shared savings among its participants is exempt from Stark and anti-kickback laws although distribution of savings outside of the ACO entity is not. Again, your participation within an ACO is an opportunity to share in savings although an ACO will be calculating the cost/benefit of including you within the entity.

   How does the cost savings and risk mechanism affect the DPM? It varies by the ACO.

   One DPM ACO participant, who is a partner in a 300+ multispecialty medical group in Southern California, explained that because he has an equal membership share, he will share equally with other physician owners in any Medicare Shared Savings Program savings the ACO distributes to its physician members.5 He explained that his entry into ACO participation did not require a lot of effort on his part since the group practice’s administrative staff took care of the paperwork, and quality and care reporting mechanisms are already in place. He is not expecting a significant savings distribution from the Medicare Shared Savings Program. Other ACOs allocate only a small percentage of any shared savings to specialists, including podiatrists.

How Quality Measures Come Into Play

Eligibility for shared savings is predicated on complete and accurate data reporting for all 33 quality measures as deemed by the CMS.4 The 33 quality measures mostly focus on ambulatory care and are categorized into four domains: patient/provider experience; care coordination and patient safety; preventive health; and at-risk populations.

   For an ACO to be eligible for shared savings, it must perform at the 30th percentile on at least 70 percent of the measures in each domain. An ACO can fail a measure in one domain and still earn shared savings. There is one caveat though. A score of zero in any domain precludes an ACO from receiving any shared savings.

   The “patient/provider experience” domain, as measured by patient surveys, is seemingly the most relevant measurement for DPMs.6 All seven questions within this domain could include a patient’s experience with you. The questions address the patient’s perception of his or her experience with the practitioner. Specifically, patient surveys measure the following seven items:

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