ACO or independence? Your options under VBC models

Questions to help you decide whether or not to join an accountable care organization

As US healthcare continues the march toward more value-based care, small independent practices must decide how they’ll evolve their financial structures to incorporate one or multiple alternative payment models (APMs).

One way of achieving the coordinated care required for value-based contracts is to join or form an accountable care organization (ACO). These organizations can provide administrative and technological support that most smaller practices cannot manage on their own. Accountable care organizations can also participate in certain value-based care programs that distribute shared savings across the group of providers. However, there may also be drawbacks, including the potential for downside financial risk, various startup costs for infrastructure and administrative expenses, or simply ending up in an arrangement that’s not ideal for you.

Are the benefits of joining an ACO worth the potential risks and expenses? Only you can decide for your practice, but here are some considerations to help you make the call, especially as the Centers for Medicare and Medicaid Services (CMS) drives toward its goal of having all Medicare beneficiaries enrolled in a VBC program by 2030.¹

What is an ACO? Accountable care organization definition

An accountable care organization is a group of healthcare providers, including hospitals, physicians, and other healthcare professionals, who come together to provide coordinated, high-quality care to a specific patient population. The primary goal of an ACO is to improve patient outcomes while reducing healthcare costs by promoting collaboration among providers, enhancing care coordination, and focusing on preventive care.²

As the name implies, ACOs are typically accountable for the quality and cost of care delivered to patients, and they may share in the savings generated from improved efficiency and effectiveness in care delivery.

The CMS offers a few alternative payment models that are designed around the formation of ACOs to deliver care to Medicare recipients. These programs are part of a second generation of ACO programs that CMS previously ran and have either been discontinued or optimized and relaunched under a different name (for example, Next Generation ACO Model concluded and has been replaced by the ACO REACH model).³  

In addition to CMS-developed programs, there are also commercial ACOs that encourage doctors and hospitals to partner with large payers.

Joining a hospital- or physician-led accountable care organization

Joining an ACO offers benefits that can help address many challenges independent practices face today. Some of these benefits may include: 

• Pooled resources for administrative tasks like claims processing, medical coding, medical billing, and various types of reporting.
• An avenue to participate in shared savings programs without taking on too much risk. Some programs, like the Medicare Shared Savings Program (MSSP), are designed specifically for ACOs.⁴
• Facilitates better care coordination between participating practices, which improves outcomes and lowers costs.
• Fulfills your Medicare patients’ requirement to enroll in an accountable plan by 2030.

While ACOs in general can offer these benefits, each group is unique. Knowing certain specifics about the organization you’re considering is important. For example, you may have the option to either join a hospital-led ACO or join (or help form) a physician-led ACO. 

Hospital-led ACOs emphasize integrating hospital services with outpatient care, leveraging the hospital's resources and infrastructure to coordinate care across various settings, like primary care, specialty clinics, long-term care facilities, behavioral health practices, and others. The focus may be on managing complex cases and ensuring that patients receive comprehensive services within the hospital network.

Physician-led ACOs, on the other hand, typically emphasize primary care and the role of physicians in patient care coordination, focusing on preventive measures and chronic disease management. Physician-led ACOs may prioritize patient engagement and continuity of care, aiming to improve health outcomes through strong physician-patient relationships.

Leadership structure is just one variable. Next, we’ll look at some of the questions you should ask to better understand your ACO options, and help you decide which is best for your needs.

Weighing pros and cons of participating in an ACO  

According to the American Medical Association (AMA),⁵ finding success with ACOs can be a worthy goal for physicians who want to stay independent but requires both planning and expertise on topics like financial risk, data access and governance, and physician obligations.⁶

Let’s take a closer look at the benefits and potential risks of selecting and joining an ACO, as well as some of the questions you should ask as you work through your evaluation.

Benefits of ACO healthcare

What are the advantages of an ACO? Joining an ACO offers several potential benefits for small medical practices.

For one, ACOs are designed specifically to facilitate better care coordination, communication, and collaboration among healthcare providers. This coordinated care is great for patients—especially those with chronic conditions like diabetes, heart disease, and hypertension—and it should also create efficiencies between you and the other care providers you're partnered with.

Small practices that join an ACO can also gain access to resources, tools, and technologies that they might not be able to afford independently. This includes data analytics and IT infrastructure that support quality improvement initiatives. These types of resources are especially important as small practices navigate the shift from fee-for-service to value-based care models that require stronger data and technology competencies.

Of course, joining an ACO should also deliver financial benefits. These benefits most commonly take the form of shared savings through programs like MSSP, which distribute payments to ACOs that meet certain quality benchmarks and which lower costs for Medicare. Many ACO models offer upside-only risk arrangements, meaning that practices can share in savings without facing penalties for not meeting certain benchmarks initially. This can provide a safety net for small practices as they transition to value-based care.

Overall, joining an ACO can help small medical practices enhance their operational efficiency, improve patient care, and achieve better financial outcomes.

Potential risks of joining an ACO

While ACOs are a strategic model developed to address certain pervasive challenges in US healthcare, joining one may not be right for everyone. You should be aware of a few potential risks as you're considering your ACO options.

First, joining an ACO may require you to adhere to specific clinical protocols and guidelines, which can limit your ability to make independent clinical decisions. Since autonomy is one of the main reasons practices choose to remain independent (rather than sell to a larger medical group), you should weigh this risk carefully.  

Next, there are also logistical and administrative considerations. For example, participating in an ACO may require additional reporting and compliance efforts, which can strain staff. Simply understanding your obligations as an ACO member can be difficult, especially if you don't fully understand them when you join.  

There are also financial risks to consider. For example, you may need to make initial investments in IT infrastructure, training, and administrative support to join and participate in an ACO. From a revenue perspective, ACOs typically involve shared financial responsibility, meaning you may incur losses if you do not meet cost-saving targets or quality benchmarks. This can be particularly challenging if you're already operating with limited financial reserves.

Understanding these risks is essential for small medical practices considering joining an ACO.

Key questions for evaluating ACO participation

Weighing the pros and cons of participating in an ACO is multifaceted and can be overwhelming. To help, we’ve developed a variety of questions you can use for your evaluation. These questions should help you consider topics like the structure and background of specific ACOs, financial considerations, data tracking and reporting tasks, and the types of support you’re looking to receive.

ACO structure and background

Can you answer these questions about the ACO(s) you’re considering?

How long has the ACO existed, and what is its track record in quality metrics and financial performance?

If you’re joining an existing ACO, do you know when the organization was formed? Does it have a documented record of success? Knowing a group’s track record can give you greater confidence in its health, or simply help you avoid poor-performing or inexperienced groups.  

What entities or practices currently participate in the ACO?

Care coordination is a primary goal of the ACO model, so knowing who you’ll be coordinating with is important. Are these other entities and/or providers conveniently located? Do their core competencies complement your own?

Costs, revenue, and other financial considerations

Joining (or not joining) an ACO is largely a financial decision. Here are some of the questions you should ask about your practice, and the ACO you’re evaluating, before you make your decision.

What are the upfront costs and ongoing expenses required from participating physicians or practices?

Will you need to make any significant investments before you can join the ACO of your choice? Common expenses include additions to healthcare IT (HIT) infrastructure, staff training, and administrative support.

How does the ACO manage financial risk—and what happens if the ACO incurs losses?

ACOs can participate in programs that offer both upside-only risk, as well as downside risk. Some ACOs initially take on limited risk and increase their exposure over time. Certain programs, like MSSP, require ACOs to take on downside risk within 5 years. Knowing these parameters is important for understanding how much financial risk you’ll take on initially.⁷

How are shared savings distributed among participating providers? What are the criteria used to determine each provider’s share?

In the simplest terms, ACO participants work together to efficiently coordinate care while driving down costs for Medicare. The amount of savings the ACO achieves is distributed among the participating practices. Do you understand how the ACO plans to generate these savings? What share will you be entitled to?

Governance and decision-making questions

How much influence and control will you wield in your ACO? How much control do you want? Your role in the ACO, as well as the obligations that go along with that role, should be clearly defined and communicated.

How is the ACO governed, and what opportunities exist for participating physicians to influence decisions?

Your ACO may not be required to disclose its participation agreements with you. This information is likely included in the ACO’s agreements with payers (including the Federal government), but not necessarily provided to you. For this reason, it’s worth asking directly about governance. Any reluctance to share participation agreements should be viewed as a red flag.

What are the time commitments for meetings, administrative tasks, and other participation requirements?

Time is a precious resource, and most physicians already feel strongly that they don’t have enough of it to comfortably do their job. Will joining an ACO alleviate your burnout? Or are the time commitments prohibitive?

Quality measures tracking and reporting

Tracking and reporting on certain quality metrics is foundational to most VBC programs and is an important task for any ACO. Do you understand how quality will be managed and how much support you’ll receive for this function?

What specific quality metrics does the ACO track, and how will your practice’s performance be assessed?

VBC program performance is typically determined based on quality metrics like patient outcomes (e.g., blood pressure control), patient satisfaction, preventative care management, chronic disease management, cost of care, and others. Can you track this data today? Will you need to as a member of the ACO?

What technology or systems are required for reporting quality measures, and does the ACO provide support for these systems?

Do you have a good understanding of the current state of your HIT capabilities? Do the technology and services offered through the ACO complement your own?

Impacts to patients and patient attribution

Joining an ACO may result in excellent benefits for your patients, like better care coordination, improved health outcomes, and access to a broader array of providers. However, you and your patients may not see it that way. Consider these questions.

How does patient attribution work, and how will participation affect your existing patient relationships?

Will you continue to see all your current patients once you’ve joined the ACO? Or will some be attributed to a different provider in the ACO? Be sure to understand patient attribution, and how it will impact your current patients, before joining an ACO.⁸

Access to support and resources

One of the great benefits ACOs offer to small, independent practices is access to advanced technologies, data management and analytics infrastructure, staffing, and training resources. If this type of support is important to you, be sure you take the time to understand exactly what you’ll be getting from the ACO.

What resources or support does the ACO provide to participating physicians?

Additionally, how will this support and these resources be accessed? Are there limits to that access? Can the ACO provide the kind of support you need? For example, if the ACO will surface care gaps for you, how will they be reconciled to your EHR? Will it be a manual process that someone at your practice will be responsible for? Or, will these care gaps come through an interface and automatically populate into the right section of your EHR? If so, will that integration cost anything to stand up or maintain?

Evaluating your technology stack for ACO participation

If you’ve determined you’d like to join an ACO, you should also take time to understand your current technology-enabled capabilities and how they will interface and integrate with the additional technology support you’ll receive from the ACO.

Here are some technology-related questions to consider:

• Interoperability: can your current IT systems easily integrate with the ACO's technology?
• Data analytics capabilities: does your healthcare IT solution provide robust analytics tools to track performance metrics, patient outcomes, and cost-effectiveness?  
• Support for care coordination: does your technology facilitate care coordination among different providers within the ACO?
• Patient engagement tools: does your healthcare IT solution include features that enhance patient engagement, such as patient portals, telehealth capabilities, and communication tools?  
• Training and support: will your staff receive adequate training and support to use the new or upgraded technology effectively?  

These features are important in-house capabilities for any medical practice and are valuable both for fully independent practices and those participating in an ACO.

One way of achieving the coordinated care required for value based contracts is to join or form an accountable care organization (ACO). These organizations can provide administrative and technological support that most smaller practices cannot manage on their own. 

athenaOne helps independent practices and ACO-participants succeed

Whether you decide to remain independent or join an ACO, our athenaOne platform can help you succeed. athenaOne is an all-in-one platform with consolidated capabilities for electronic health records (EHR), practice and revenue cycle management, and patient engagement.

Our EHR capabilities streamline your daily workflows, creating efficiencies and giving you access timely, actionable clinical information so you can close care gaps and improve outcomes. Our medical billing support helps you get reimbursed faster and succeed under various payment models, including alternative payment models. And, our suite of patient engagement tools and services help provide your patients with a great experience including convenient communication channels, self-scheduling, and more.

Our interoperable system can connect with multiple clinical partners, including seamless, secure data exchange with local ACOs, to meet care coordination requirements. Our HIT platform also facilitates the tracking and monitoring of patients both inside and outside the practice, in order to measure and report on quality-based healthcare outcomes.

If you’re ready to begin evaluating specific ACOs, athenahealth can help. The athenahealth Marketplace lists several ACO partners, each with out-of-the-box integrations for athenaOne. It’s a great place to start your ACO search.

If you’d like to learn more, read the articles below.