Do You Know What an Accountable Care Organization (ACO) Is?

Healthy Living

November 10, 2015

ACOs a New Model of Health Care

The Obama administration through the ACA (Affordable Care Act) has commenced a shift from the Medicare model that rewarded hospitals for volume to the new policy that now incentivizes hospitals, doctors, specialists and other healthcare providers to share responsibility for first and foremost better quality healthcare outcomes for Medicare patients.

This new model of health care that the ACA healthcare law has inspired is called Accountable Care Organizations or ACOs. As part of the Affordable Healthcare Act the Obama administration has created new provisions of the law that incentivizes hospitals for quality outcomes. These new healthcare models are networks of hospitals, and doctors as well as other healthcare providers who in conjunction with each other coordinate care of its patients in order to prevent hospitalizations, reduce the number of hospital readmissions, reduce the number of infections, and reduce unnecessary testing all with the goal of providing better quality care and better outcomes to Medicare patients.

Are ACOs Working?

According to a recently released report by the federal government the number of ACOs is growing and saving the taxpayer funded Medicare program money. The Obama administration has projected a goal for its intentions for the ACOs. Right now there are approximately 420 ACOs in the Medicare program that are responsible for the care of 7.8 million Medicare patients, Obama’s goal is to have ACOs account for half of Medicare reimbursements as of 2018. Currently there are 333 Medicare Shared Savings Program ACOs and 20 Pioneer ACOs which according to the Centers for Medicare and Medicaid Services had a combined savings in excess of $411 million dollars to the taxpayer funded programs. There will be more ACOs entering the market in January of 2016 so Obama’s goal is seen as possible to achieve.

The ACOs that create savings above a certain level can receive incentive bonuses paid from the savings they create, but as of 2014 only one out of four ACOs reduced spending enough to earn incentive bonuses and more than five of them had losses. Experts agree that there is still much work to be done, but hospitals and doctors are aggressively looking at new approaches to better manage the care of its Medicare and Medicaid patients. Sean Cavanaugh, a Medicare deputy administrator said, “We all have more work to do so beneficiaries understand what it means to be in an ACO.” “But we know patients in ACOs report they’re receiving better care in ACOs, even if they don’t understand the concept.”

How Do You Join an ACO?

Right now the federal government has been assigning Medicare patients to the various Accountable Care Organizations, but beginning next year a test program will be permitted to solicit patients directly in hopes of getting a share of 55 million Medicare patients. Currently 29 percent of the 55 million Medicare patients are covered by Medicare Advantage. The other 71 percent remain covered under the fee-for-service coverage which is what the Obama administration and federal health experts want to see go to ACOs or at least a substantial portion of that 71 percent. But health officials are going to need to do a better job of explaining to their patients just what makes an ACO a better source of healthcare delivery.

What Makes an ACO Better for Patients?

Primary care doctors that have joined or formed an ACO are required to inform their patients of this fact, because they will be referring their patients to other doctors and specialists within their ACO. But patients are not required to see the doctor referred by their primary care physician; patients are still free to see other doctors of their choice outside of the ACO without paying more for seeing a doctor outside of the ACO.

The concept of the ACO is to improve patient care by creating a network of doctors that share in responsibility for the patient’s care. The idea being that when these doctors work as a team in unison, the sharing of information and patient care responsibility leads to better patient care. ACOs also are under specific quality standards imposed by the ACA and the federal guidelines. If the ACO does not meet these higher quality standards they cannot qualify for the incentive bonuses and may even lose their contracts assigned to them by the federal government.

Concluding Thoughts

Any program designed to improve the quality of healthcare people are receiving while simultaneously trying to reduce healthcare costs to taxpayers is well worth looking into. When doctors are working together to improve your care and reducing duplicate testing due to that fact that alone seems very good reason to join an ACO, but the additional factor of still being able to see doctors of your choice (outside of the ACO) makes the decision a win, win for patients, what is there to lose? Seems to me the worst that can happen is you get better quality health care and still see doctors outside of the ACO at no additional cost to you.