What You Should Know About Accountable Care Organizations

Author(s): 
Beth A. Kase, JD

Comparing Commercial ACOs To Medicare ACOs

The ACO model exists in both the public and private sectors with many private health insurance companies having ACO-like contracts with providers. As with Medicare ACOs, typically the physician providers in commercial ACOs are large groups or independent practice associations that have the necessary infrastructure and information technology capacity to meet the ACO’s care coordination and reporting criteria.

   Health industry consulting firm Oliver Wyman reports that in addition to the 2.4 million Medicare beneficiaries who receive care under a Medicare ACO, up to another 15 million non-Medicare patients receive care through Medicare ACOs.7 Eight million to 14 million individuals are part of commercial ACOs run by large national and regional insurance companies for their non-Medicare populations. Commercial ACOs are having a growing impact on healthcare delivery throughout the nation.

   Commercial ACOs share a similar mission with Medicare ACOs, namely to reduce cost while improving care. However, the implementation of a commercial ACO can be different in a number of significant ways including eligibility requirements for physicians. Commercial ACOs do not need to adhere to the same number and types of quality measures as defined by the CMS. Nor does the commercial ACO need to adhere to the governance structure and cost sharing formula applicable to Medicare ACOs. The commercial payer, rather than Medicare, provides the financial incentive for quality and cost performance. Each commercial ACO differs. Therefore, your participation in a commercial ACO should be informed by the specific guidelines of the specific commercial ACO.

   A representative of a Blue Cross ACO commented that its commercial ACOs include large physician groups that may employ or contract with podiatrists, but the insurer does not dictate the group’s arrangement with the podiatrist.8 If the group shares any cost savings, it determines how such savings are distributed to group physician providers, including podiatrists and other specialists. Commercial ACOs are evolving and many variations are developing.

In Conclusion

There is an increasing number of ACOs across health systems in the United States. Providers who have the resources and infrastructure available to meet ACO requirements, such as health quality and expenditure data reporting, are in the best position to adopt this model. For DPMs who are interested in participating in an ACO, relationships with health systems, health plans, hospitals and independent practice associations will be critical.

   Medicare and commercial ACOs reward improved outcomes along with a reduction in the cost of healthcare spending. Whether you are interested in participating in an ACO or not, you are best prepared for continued changes in healthcare delivery and reimbursement if you have a process to monitor your quality, efficiency and expenditures. Demonstrating your provision of cost-effective care will continue to be an imperative in this healthcare market.

   Ms. Kase is an attorney at Fenton Nelson in Los Angeles.

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