Are you tired of the long hours of surfing the internet in an attempt to draw a picture of the full spectrum of US healthcare? Are you lost in the web of legislations and standards? Well, you are not the only one. I have been through this myself and also the very reason why I have started this blog series; to try and save the precious hours of the most valiant creatures in the world like us, who have taken up the challenge of solving the biggest complexities in the universe ‘US Healthcare’.
In this part I will be briefly covering the concept of an ACO (Accountable Care Organization) which is amongst the latest fads in the US Healthcare Industry.
So, what is an Accountable Care Organization (ACO)?
In simple words, an ACO is a healthcare organization which consists of various providers that come together to deliver quality healthcare services to a particular population while trying to reduce the per-capita cost of their care.
Centers for Medicare and Medicaid Services (CMS) defines an ACO as "an organization of health care providers that agree to be accountable for the quality, cost, and the overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program that is assigned to it."
Though the concept of an Accountable Care Organization (ACO) is relatively old, Elliott Fisher is the one who is credited for coining the term in the year 2006. The inclusion of provisions for ACOs in the Patient Protection and Affordable Care Act (Obamacare) under the title ’Shared Savings Program’ has given the term “Accountable Care Organization” widespread attention in the US Healthcare Industry.
An ACO is formed by the collaboration of various healthcare providers (physicians, hospitals and other healthcare providers), payers (primarily Medicare) and patients (primarily Medicare beneficiaries). Also a governing body has to be established for managing the operations of an ACO. Beneficiaries are associated to the ACO through their Primary Care Providers (PCPs) assigned by CMS.
ACO and the Medicare Shared Savings Program (MSSP):
The Medicare Shared Savings Program (MSSP) intends to promote the Medicare Fee for Service providers to provide coordinated care to specific groups of Medicare Beneficiaries by the formation of ACOs. This would help in reducing the quantity of unnecessary procedures performed by the providers which seldom have an impact on the clinical outcome of the patients. This in turn would reduce the per capita cost of care and result in reduced healthcare funding. To promote the providers to do so, the program proposes to share a significant amount of these savings with the providers. But the program also tries to ensure that the quality of care is not compromised in an effort to increase the amount of savings. For this the MSSP requires the ACOs to report certain quality measures to calculate their overall performance and share the savings accordingly.
Some of the major functions that an ACO needs to carry out are as follows:
- ACO Administration: Managing a list of various beneficiaries and participating providers associated with the ACO
- Healthcare Data Integration: Collecting health related data from various providers associated with the ACO and creating a common clinical data repository of all the beneficiaries
- Data Extraction and Reporting: Reporting healthcare measures to CMS derived from the clinical data repository using ACO PQRS web interface
- Business Intelligence and Analytics: Investigating and validating the accuracy of the data and forecasting healthcare outcomes and the associated costs to take important decisions.
- NCQA Certified CAHPS Survey: Arranging for surveys to be taken by its beneficiaries and reporting it to CMS
- Health Information Exchange: Facilitate the exchange of information amongst various providers in the ACO for better coordinated care
- Clinical Decision Support: Facilitate Clinical Decision support based on the data from patient encounters within the ACO, a clinical knowledgebase and a defined set of rules
- Patient Portals: Seeking active engagement of the patients in their healthcare by giving them access and ownership of their data
- Financial Management: Defining rules based on performance indicators to calculate incentives/savings and distribute them to the providers
- Educational Resources: Providing various entities in the ACO with external and internal educational resources and data dictionaries
Benefits of creating ACOs:
ACOs are required to be able to successfully report clinical quality measures while performing as per the prescribed quality standards. They also need to achieve significant savings in the overall healthcare cost based on the benchmarks set by CMS. If both of these goals are achieved Medicare pays a significant amount of the savings to the ACO. This amount is then distributed amongst the various providers in the ACO based on defined rules. Also the ACO does not have to pay any penalty which would have been imposed on the ACO otherwise. Currently the ACOs can participate in two different payment models i.e. MSSP ACO model and Pioneer ACO model.
To sum up, the basic purpose of the introduction of ACOs in the US Healthcare Industry is to bring down the per capita cost of care without compromising the quality of healthcare being provided.
Hope that the concept of an ACO is now quite clear to you. For more ‘US Healthcare’ complexities that I have unveiled, stay tuned to read my next blog on Medicare Shared Savings Program (MSSP).
