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Marc Klar

By: Marc Klar on November 2nd, 2017

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What Is an Accountable Care Organization?

Value-Based Care

You went into the field of medicine to help others. Today, that help involves a number of elements designed to ensure that providers, technology, and delivery methods are operating tightly to produce better results with less expenditure, especially as it applies to Medicare patients since the government is involved with that.

And because the government has such a vested interest in controlling the cost of healthcare delivery as it applies to Medicare, it's placing higher scrutiny on the way Medicare patients are treated. For them, it's no longer about how many visits can be gotten from any Medicare patient on a fee-for-service basis.

It's about how many visits and readmissions can be eliminated by providing more comprehensive care while expending less doing so. That's the value-based care model, which is calculated to save Medicare billions of dollars annually.

One value-based care model type you've probably heard of is an Accountable Care Organization (ACO).

An ACO consists of doctors covering a range of specialties, a hospital(s), and other health care providers who are generally in the same geographic location, and who are bound together under the ACO's umbrella in an effort to better coordinate the highest quality care for their collective Medicare patients, while actually spending less doing so in a tightly orchestrated setting.

At the center of an ACO is the Medicare patients' primary care physician. The ACO’s hospital(s) and other doctors and providers join ranks as needed to share the medical responsibilities in an effort to drastically reduce the amount of unnecessary spending.

The benefit of ACO membership is that a patient's healthcare expenditures are calculated in the ACO vs. regular fee-for-service arena...what those same costs would've been in a non-ACO scenario. Essentially 100% of the time, the savings is extraordinary. The ACO's members share in a percentage of that savings which, again, amounts to a lot of per-member revenue. Even with that per-member share payout, Medicare still saves -- as the expression goes -- a ton of money.

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A Brief ACO History

The term “Accountable Care Organizations” was first coined by Elliott Fisher, MD, Director of the Center for Health Policy Research at the Dartmouth Medical School in 2006. In 2009, the term garnered intense interest, because along with MIPS, it became an official quality payment program (QPP) as part of MACRA, all of which falls under the Affordable Care Act.

Just by way of a recap thus far, the goal of the coordinated care provided by an ACO is to ensure that all Medicare patients and populations get the comprehensive care they need in a way that would actually reduce expending resources.

If your practice or group is interested in joining a local ACO, you should become familiar with either of two payment models that can be adopted by an ACO.

Payment Models for ACOs

The two payment models for Accountable Care Organizations are:

  • Medicare Shared Savings Program is designed to assist Medicare fee-for-service program providers to become an ACO affiliate.

  • Advance Payment ACO Model is followed by participants in a Medicare Shared Savings Program.
Just for information, the Pioneer ACO Model is now defunct, but was a third program designed for very early adopters of coordinated care efforts.

Should I Participate in an Accountable Care Organization, and How Would I Get Involved?

The fact that any of your colleagues are doing well by participating in a certain ACO may not mean it's good for you to join. Only you can make that decision based upon the available information on that ACO. But generally speaking, here are two reasons for which you might want to consider joining an Accountable Care Organization:

Better Care

It’s been demonstrated that ACOs do succeed in helping providers deliver high-quality care while at the same time spending health care dollars more economically and judiciously than previously thought possible.

Medicare Is Promoting ACO Participation

Medicare insureds are no doubt the likeliest patient group to require medical care the most.

Since Medicare is encouraging the movement of patients toward healthcare resources that are part of an ACO, your organization may want to participate in order to promote better health in your community while bolstering your bottom line through the ACO's financial incentives.

By the way, some Medicare online listings and publications are highlighting physicians who participate in an ACO as being those to consider for getting more comprehensive, tightly watched care. This subtle (or not so subtle) suggestion probably steers patients toward those physicians.

What Do You Need?

Technology plays a definite role in ACO membership.

Every ACO member must use a certified Electronic Health Record (EHR/EMR) that's capable of interfacing with the ACO’s practice management (PM) software, as well as with any other EHRs and systems used across the enterprise. Generally speaking, ACOs will let its members use their EHRs of choice, as long as they're certified and capable of interfacing as described.

It’s best to go with an EHR vendor that has a demonstrated track record of success and an industry reputation for keeping the application current and regularly updated.

Everyone in healthcare today who's treating Medicare patients needs to seriously consider, and we think, actually do what's needed to move into value-based care.

Joining an Accountable Care Organization is one way to do that, if it makes sense in your particular world.

Key Takeaway:

  • The U.S. government has a vested interest in reducing the high costs associated with treating Medicare patients.
  • Dr. Elliott Fisher came up with the term “Accountable Care Organization” or ACO in 2006, and the term drew more interest three years later with its association with the Affordable Care Act.
  • A major goal of coordinated care provided by an ACO is to ensure that all patients and populations get the right care they need at the right time, every time.
  • Payment models for ACOs include the Medicare Shared Savings Program and the Advance Payment ACO model.
  • Joining an ACO is designed to help your team deliver higher quality health care in a more affordable manner for Medicare patients.
  • One absolute across the board ACO requirement is to have a certified EHR that can interface with any number of other systems within the ACO.

Keeping up with all the industry changes that can affect the way you deliver care can be difficult, given your busy schedule. This is why we are inviting you to click here today to subscribe to this blog, so you can stay current and informed.



Disclaimer: Joining an ACO needs to be right for you, and only you and your team can determine that based on all of the parameters of the ACO you’re considering. The information presented here is based on our best understanding of ACOs. Visit www.cms.org for more information on ACOs, or if clarifications are needed.

About Marc Klar

Marc has decades of experience in medical software sales, marketing, and management.

As Vice President of Marketing, Marc oversees the entire marketing effort for ADS (the MedicsCloud Suite) and ADS RCM (MedicsRCM).

Among other things, Marc enjoys writing (he’s had articles published), reading, cooking, and performing comedy which sometimes isn’t funny for him or his audience. An accomplished drummer, Marc has studied with some of the top jazz drummers in NYC, and he plays with two jazz big bands. Marc was in the 199th Army Band because the first 198 didn’t want him, and he has taught drumming at several music schools.

​ Next: read our ADS and ADS RCM blogs, ebooks and whitepapers. They’ll stimulate your brain as well.