ACOs in the United States are formed from a group of coordinated health-care practitioners. The principles of primary health care pdf is accountable to patients and third-party payers for the quality, appropriateness and efficiency of its services.
ACO is “an organization of health care practitioners that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it”. Like an HMO, an ACO is “an entity that will be ‘held accountable’ for providing comprehensive health services to a population. 19 remained active through 2015. 3 million beneficiaries in 49 states. Reliable and increasingly sophisticated performance measurement, to support improvement and provide confidence that savings are achieved through care improvements. The model places financial responsibility on providers in hopes of improving care management and limiting unnecessary expenditures, while providing patients freedom to select their medical service providers. ACO’s model of fostering clinical excellence while simultaneously controlling costs depends on its ability to “incentivize hospitals, physicians, post-acute care facilities, and other providers involved to form linkages and facilitate coordination of care delivery”.
By increasing care coordination, ACOs were proposed to reduce unnecessary medical care and improve health outcomes, reducing utilization of acute care services. On July 7, 2013 the Centers for Medicare and Medicaid Services announced the results of the Pioneer ACO demonstration. According to them, costs for more than 669,000 beneficiaries served by Pioneer ACOs grew by 0. Costs for others grew by 0. 8 percent in the same period.
CMS stated that 19 out of 32 pioneer ACOs shared savings with CMS. According to CMS the savings were due, in part, to reduction in hospital admissions and readmissions. These guidelines stipulate the necessary steps that physician, hospital and other health care provider groups must complete to become an ACO. Section 3022 authorized CMS to create the MSSP begin signing ACO contracts by January 2012. ACA intended for MSSP to promote “accountability for a patient population and coordinate items and services under part A and B, and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery”. MSSP ensures that ACOs are a permanent option under Medicare.
However, the specifics of ACO contracts are left to the discretion of the DHHS Secretary, which allows the ACO design to evolve. Under the program, ACOs accept a minimum of 5,000 beneficiaries. The provider network is required to include sufficient primary care physicians to serve its enrollees. The ACO must define processes to promote evidence-based medicine and patient engagement, monitor and evaluate quality and cost measures, meet patient-centeredness criteria and coordinate care across the care continuum. Prior to applying to MSSP, an ACO must establish appropriate legal and governance structures, cooperative clinical and administrative systems and a shared savings distribution method. The ACO may not participate in other shared savings programs during the MSSP period.
ACO professionals, hospitals employing ACO professionals, or other Medicare providers and suppliers” as determined by the Secretary. ACO’s incentive payments are determined by comparing the organization’s annual costs relative to CMS-established benchmarks. These benchmarks are based on an estimation of the total FFS expenditures associated with management of a beneficiary based on FFS payment in the absence of an ACO. CMS updates benchmarks by the projected absolute amount of growth in national per capita expenditures as well as by beneficiary characteristics. ACO savings must exceed in order to qualify for shared savings. The MSR accounts for normal variation in health care spending.
A one-sided model ACO shared savings for the first two years and savings or losses during the third year. In a two-sided model, ACOs shared in savings and losses for all three years. Aspects regarding financial risk and shared savings were altered in the final regulations. After the initial March, 2011 regulations, CMS received feedback regarding streamlining the governance and reporting burdens and improving the potential financial return for ACOs willing to make the necessary, and often substantial, investments to improve care. On October 20, 2011, DHHS released the final MSSP regulations.
The final regulations allowed for broader ACO governance structures, reduced the number of required quality measures and created more opportunities for savings while delaying risk bearing. Providers’ financial incentives were increased. In addition, the quality measures required were reduced from 65 to 33, decreasing the monitoring that providers claimed were overwhelming. Community health centers and rural health clinics were allowed to lead ACOs. CMS introduced the one-sided and two-sided payment model.
The one-sided model offered shared savings for the first two years and added shared losses for the third year. In the two-sided model, ACOs shared savings and losses for all three years. For both models, the shared loss cap increases each year. Initial feedback raised concerns regarding ACO’s financial risk and possible cost savings. On October 20, 2011, DHHS released the final regulations that altered providers’ financial incentives.
CMS established five domains in which to evaluate ACO performance. ACOs are composed mostly of hospitals, physicians and other healthcare professionals. Depending on the ACO’s level of integration and size, providers may include health departments, social security departments, safety net clinics and home care services. The various providers within an ACO work to provide coordinated care, align incentives and lower costs. ACOs are different from HMOs in that they allow providers much freedom in developing infrastructure. Any provider or provider organization may assume the leadership role. Medicare is the ACOs primary payer.
Other payers include private insurances and employer-purchased insurance. Payers may play several roles in helping ACOs achieve higher quality care and lower expenditures. Payers may collaborate with one another to align incentives for ACOs and create financial incentives for providers to improve healthcare quality. ACO’s patient populations primarily consist of Medicare beneficiaries. In larger and more integrated ACOs, the patient population may also include homeless and uninsured people. Patients may play a role in the healthcare they receive by participating in decision-making processes.