Know What a Medicare ACO is Before You Jump

With the Centers for Medicare & Medicaid Services (CMS) predicting the number of affordable care organizations (ACOs) will double to 300 by the end of 2012, it is time to start thinking about what you and your providers need to do to become Medicare ACO partners.

How does a Medicare ACO function and how will it potentially affect your office?

Born of the Affordable Care Act, Medicare ACOs are made up of a group of Medicare providers and suppliers. Under the ACO, the providers and suppliers agree to band together, coordinating care, documentation, and billing for patients, improving quality and cost savings in the process. Providers, payers, and newly established groups have applied to CMS for approval to start an ACO, which if approved must operate for at least three years.

An ACO’s quality performance is evaluated in five areas: care coordination, patient safety, preventive health, patient/caregiver experience, and at-risk population/frail elderly health.

CMS’ Medicare Shared Savings Program (MSSP) bases financial incentives to ACOs on successful cost reduction via care coordination. Under the MSSP, ACOs serve a minimum of 5,000 beneficiaries and must provide enough primary care physicians to easily serve the population. Before applying for MSSP status, an ACO must establish legal and governance structures, cooperative clinical and administrative systems and a shared savings distribution protocol.

Incentive payments are based on comparing an ACO’s annual incurred costs relative to CMS determined benchmarks and ACOs can choose to be reimbursed based on a “one sided” or “two sided” model. The one sided model allows the ACO to share a maximum of 50 percent for the first two years and savings or losses the third year. The two sided model allows a maximum of 60 percent sharing of savings and losses for all three years. Shared loss grows from 5 percent to 10 percent over the three year period.

A key to success is the communication of patient information, which adds a new perspective on current, interoperative electronic health record (EHR) systems. ACOs were ideated to encourage seamless treatment of patients by teams of providers from different entities and disciplines. Universally reliable documentation and classification of each patient may help providers meet incentives while providing improved quality of care.

If you are updating your EHR, investigate its ability to capture and communicate the information needed by other practices, physicians, and providers who may be joining your practice in a future ACO.


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One Response to “Know What a Medicare ACO is Before You Jump”

  1. Howard Finelt says:

    How can I find a Medicare ACO?

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