Suppliers and providers alike have been anticipating the arrival of accountable care organizations, or ACOs, since the Affordable Care Act was signed into law in March 2010. Given the Supreme Court’s decision this summer to uphold the law, it’s a good bet that ACOs will not only arrive on the scene, but stay here as well.
Accountable care organizations are teams of doctors, hospitals, and other healthcare providers and suppliers that will coordinate and (ideally) improve care for Medicare patients. If an ACO saves money by getting beneficiaries the right care at the right time – for example, by improving access to primary care so that patients can avoid a trip to the emergency room – the ACO can share in those savings with Medicare. ACOs that fail to meet quality standards cannot share in program savings, and over time, will be penalized.
In October 2011, the Department of Health and Human Services announced two initiatives – the Medicare Shared Savings Program and the Advance Payment model – designed to help providers form accountable care organizations. Two months later, in December, HHS named 32 healthcare organizations that will participate in the Pioneer Accountable Care Organization initiative. Then, in May 2012, the Centers for Medicare & Medicaid Services selected the first 27 accountable care organizations to participate in the Medicare Shared Savings Program.
More recently, in July 2012, CMS announced that 88 new organizations had entered into agreements with Medicare to participate as accountable care organizations. The 88 ACOs brought the total number of organizations participating in Medicare shared savings initiatives to 153, including the 32 accountable care organizations participating in the testing of the Pioneer ACO Model, and six Physician Group Practice Transition Demonstration organizations. In all, as of July 1, more than 2.4 million beneficiaries were receiving care from providers participating in Medicare shared savings initiatives, according to CMS.
Wheels in motion
With all the wheels in motion, could the ACO train have been stopped had the Supreme Court overturned the Affordable Care Act? The answer is “no,” at least according to two ACO executives with whom the Journal of Healthcare Contracting spoke.
“Our work would have continued had the Supreme Court struck down the Act, because of our strong desire to improve quality and reduce costs for our patients [regardless of] what type of coverage they carry,” says Rita Potter, director of managed care, The Nebraska Medical Center. The medical center and neighboring Methodist Health System formed the Accountable Care Alliance, an ACO, in January 2010, two months prior to the signing of the Affordable Care Act. “The market pressures are going to continue to push us as providers to be more cost effective,” she says. The Accountable Care Alliance stirred interest among supply chain executives earlier this year when it signed a deal with three vendors of cardiac rhythm management devices.
“We started our efforts two years ago, and we had no idea what would happen politically then,” says Potter. “The new venture has provided a mechanism and momentum to share best practices together. Had the Supreme Court overturned the entire law, we would have continued, due to the fact that cost and quality pressures are still present in our market from our commercial payers. The [Accountable Care Alliance] still would be a viable option.”
Prepared for any change
Glenn Smith, program manager for Physician Health Partners, a primary-care-based accountable care organization in Denver, Colo., echoes Potter’s determination. “Many of the care and quality initiatives in the Affordable Care Act are things we’re been working on for quite some time,” he says. “We were prepared for many of these changes and would have continued to develop new programs either way.”
Physician Health Partners collaborates with more than 300 primary care providers, both physicians and midlevel providers, in the Denver metro area, and approximately 600 specialists. For the ACO model, the organization is partnering with two IPAs – Primary Physician Partners and South Metro Primary Care – with the goal of collaborating to improve patient care while lowering associated costs.
“Our organizational mission would not have been affected if the Affordable Care Act had been repealed,” says Smith.
“Physician Health Partners has provided patient resources and care management services to the Medicare Advantage population for over 10 years through our longstanding risk contract. The Pioneer ACO has allowed us to utilize our existing clinical programs and physician resources to provide Medicare fee-for-service beneficiaries with the same high quality, well-coordinated care that we have shown lowers the cost of healthcare and decreases duplication of services.
“Because much of our infrastructure existed before the Pioneer ACO, we are now really focusing on adding resources to care for this expanded population and continue to develop programs and resources for patients to receive better health outcomes. In addition, the Pioneer ACO program was already funded and supported by the CMS Innovation Center. We didn’t anticipate the program changing based on the outcome from the Supreme Court.”
As a Pioneer ACO, Physician Health Partners will be held accountable to a number of quality measures. “But it’s not a new philosophy or initiative for our physicians,” says Smith. “When we analyzed our independent practice association quality measures and then added the ‘meaningful use’ quality metrics for electronic health record systems, we found very few ACO measures that didn’t align with at least one of these existing programs. Had the Affordable Care Act been overturned, there may have been two or three fewer metrics for 2012. We anticipate many of the metrics to continue to align across programs.
“We have been making huge strides as a Pioneer ACO by identifying patients across the continuum of care that have gaps in their care and are working to close those gaps to provide them with better care,” says Smith. “With the Pioneer ACO structure, it will also allow commercial payers to work more closely with physician groups to improve the healthcare delivery in all populations. We are excited to see what possibilities lay ahead for our company, the physicians and the patients we serve in Colorado.”