Top 5 Ingredients of a Successful Accountable Care Organization

Because of the Affordable Care Act, the healthcare industry continues to move toward value-based care. As a result, Medicare has invested heavily in value-based reimbursement structures, such as accountable care organizations (ACOs), which turn to value-based reimbursements as a way to deliver high-quality, cost-effective care.

“We are dedicated to using incentives for higher-value care, fostering greater integration and coordination of care and attention to population health, and providing access to information that can enable clinicians and patients to make better-informed choices,” US Department of Health & Human Services (HHS) secretary, Sylvia Burwell, said in a previous report.

HHS set a goal of turning 30 percent of fee-for-service Medicare payments to alternative payment models such as ACOs by the end of 2016. By the end of 2018, HHS wants 50 percent of payments to be in the form of alternative payment models.

In this new healthcare climate, payers and providers believe that value-based reimbursement will overtake fee-for-service by 2020. However, they face many challenges as they try to integrate new reimbursement models.

In order for ACOs to thrive and successful implement value-based care, they should look at how value-based reimbursements are changing the industry, determine the right leadership and clinical buy in, foster trust among partnerships and keep a line of honest communication open with payers. ACOs should also utilize technology and workflow processes that successfully support population health and patient-centered care.

Understanding of the way value-based reimbursements are changing healthcare

Many equate traditional models, such as fee-for-service reimbursements, with high-cost, low-quality care. Value-based reimbursements, on the other hand, incentivize quality, cost-effective care. They continue to replace fee-for-service reimbursements.  

Last year, HHS declared that 85 percent of hospital Medicare payments would be linked to performance and value toward the end of 2016.  

It’s important for providers to understand how value-based reimbursements work so they can understand how they will get paid.  For example, the Merit-Based Incentive Payment System (MIPS) will have a significant impact on provider reimbursement.

From 2015 to 2019, providers in the Medicare program get an automatic 0.5 percent payment increase. The base reimbursement rate will then stay at 2019 levels through 2025. During that time, providers will be able to supplement their reimbursement through payment adjustments in MIPS and participation in alternative payment models (APMs).

Starting in 2026, providers who receive a significant share of their revenues through an APM are eligible for a one percent annual increases as opposed to 0.5 percent increase for those not participating in APMs.

“Starting in 2019, Medicare reimbursement will be affected by the MIPS score, which is a number from 0 to 100 calculated by the CMS based on data from four categories,” the Healthcare Billing & Management Association reported. “CMS will issue a bonus payment adjustment of up to 10 percent for providers who exceed the 25th percentile of MIPS scores – and the pot will be $500 million each year from 2019 to 2024.” They said.

Under the value-based reimbursement model, it’s in a provider’s best interest to have a high MIPS scope. That might be difficult to newcomers to this system that are still transitioning from the fee-for-service model. For providers who have low scores but who still show improvements will still be rewarded.

According to the American Academy of Family Physicians, quality improvement organizations and regional extension centers will be providing technical assistance to providers who need help improving their MIPS scores.

“Help is on the way: $20 million will be available each year from 2016 to 2020 for technical assistance available to help practices with 15 or fewer professionals improve MIPS performance or transition to alternative payment models,” the Healthcare Billing & Management Association reported.

The right leadership and clinical buy-in

According to Aetna, partnerships should have a clinical leader who can inspire and influence physicians to buy into the ACO. He or she should also connect with patients and explain the vision of the ACO. This leader should clearly explain to patients how their overall health can improve due to value-driven care.

Overall, leaders who have the ability to foster relationships both payers and various healthcare professionals within their group are likely to use collaborative efforts that benefit patients, leading to the implementation of value-based care.  

ACOs should also have a program manager with large-scale implementation experience, Aetna said. Other qualities various leaders should have include: strong analytical capabilities, report writing experience, strong data management skills and IT skills.

Trust between partnering organizations

In order for an ACO to run smoothly, partnering healthcare professions need to be able to work together effectively and have some level of trust. If trust is nonexistent within an ACO, healthcare professionals may struggled to collaborate effectively.

“Physicians have keen memories, and a lack of trust between physicians and administration breeds misconceptions of the hospital. Left unresolved, trust issues can slow or derail efforts to collaborate and organize an ACO,” The Camden Group said.

If healthcare professions in an ACO are unable to trust each other, they will have a difficult time moving forward on quality initiatives or allocate reimbursements within the organization. “While the past may never be forgotten, opening the lines of communication, promoting transparency, engaging physicians in the planning and development processes, and creating a common fact base of understanding are ways to build trust.” The Camden Group said.        

Open and honest communication with payers

Provider-payer relationships have experienced a great deal of friction in the past. “Historically, relationships between medical groups and insurers have been adversarial, making the task of forming this next generation of contracts between health plans and ACO groups challenging. Specifically, payer–provider relationships are often complicated by distrust, conflicting objectives, and a lack of data transparency,” the American Journal of Managed Care said.

It’s beneficial for payers and providers to have relationships built on trust and open communication, as more providers transition to value-based care and assume more risk for the quality and cost-effectiveness of the patient care they administer. When ACOs have these qualities, both payers and providers can openly review each other’s care management capabilities and data analytics. It’s also easier for them to exchange ideas on patient engagement.

“There are very meaningful ways in which these two parties can collaborate. There are opportunities for them to look differently at how payment is derived and what gets paid for. There has to be transparency and trust. It means those parties need to change their business models. Obviously, that’s not a small feat,” said Dr. Rita Numerof, PhD, Author, Co-founder and President of Numerof & Associates.

Technology and workflow processes that support population health and patient-centered care

To be successful, ACOs also need to make investments in technology platforms. This can pose as a challenge for ACOs as many providers don’t know how to use the technology their organization has correctly. Many providers also struggle with learning new technologies. As a result, ACOs often experience interoperability and systems integration issues. This leads to roadblocks in their data collection process.

If ACOs can use technology to overcome some of these obstacles, they have a better chance of gathering important data on their patients that aids care coordination, predictive risk stratification, chronic disease management, and better clinical decision support.

Also, health IT can play a role in an ACO’s ability to communicate effectively while managing patients across different care settings. Advanced use of health information exchange and a robust EHR infrastructure can ensure that patient data is available to as many providers as possible.

As more ACOs mature and develop, it’s likely that they will do a better job of fostering community health and coordinated care. Overall, they represent the future of a healthcare industry’s shift towards patient-centered care.