3 Things to Consider Before Joining an ACO

By Gay De Hart, SVP, Strategic Initiatives, Mingle Health
Twitter: @MingleHealth

If you are a part of an organization that provides healthcare services, you’ve seen big changes in how services are paid. The days are numbered for a simple fee-for-service payment system. Providers dependent on fee-for-service face increasing financial risk going forward. Payment contracts are shifting to “value-based payments,” where quality and efficiency are considered in the payment for services. One of the most popular new healthcare delivery models for value-based payments is the Accountable Care Organization or ACO.

How do ACOs work?
In the ACO model, providers work together to be accountable for the health of a defined population of patients. They are a population health model and providers are rewarded for the collective quality and efficiency of care provided. ACOs are growing in popularity in all three payer categories: Medicare, Medicaid, and commercial insurances.

ACOs are growing!
One study, Center for Health Care Strategies, Inc. (CHCS) showed that in 2017, more than 10% of all insured populations were in ACOs.

A Medicare ACO is a contractual agreement between a practice and an administrative organization. Similar agreements may also apply to Medicaid or commercial ACOs. Each ACO has a set of rules and conditions for participation needing careful review before joining. Here are three things an organization should consider if they are thinking about joining an ACO.

#1: Commitment to Measurement and Improvement
One of the first decisions to consider is the philosophy of an ACO and whether its right for you and your practice. Focus on accountability. ACOs require measurement of quality and cost and participating practices can expect to spend a fair amount of time collecting and reviewing quality and efficiency data.

#2: Sharing Risk
ACOs come in different flavors. Some ACOs only share savings when compared against a cost benchmark. If the actual cost is below benchmark, the ACO earns savings. Other ACO models share both savings and risk in case costs exceed benchmark. Because losses in an ACO can be substantial, its critical for a practice to fully understand the potential liability of an ACO contract that includes loss provisions.

#3: Financial Benefit
ACOs bring a new opportunity for healthcare providers to provide high-quality care and earn financial rewards not available in the fee-for-service world. Taking care of a population, “Population Health” is a different model of delivering care. Health IT plays a very important role to understand which patients have recently been admitted or discharged from the hospital, need preventive health services and chronic care management. Managing an ACO strategy requires an EMR and health IT that informs the practice team in advance with the right information, at the right time, on the right population of patients. Having accurate, actionable information is a necessity in providing high quality, low-cost care.

Don’t make a hasty decision when considering joining an ACO. Although there are great benefits to participating in ACOs, organizations need to make a strategic decision based on many considerations if they want to fully understand and gain the benefits before joining. This will help to ensure that organizations are selecting the right ACO that will work best for them and that they are not putting their financial well-being at risk.

This article was originally published on Mingle Health and is republished here with permission.