Three Considerations before Joining an ACO

Hundreds of accountable care organizations (ACOs) have cropped up across the country - and experts predict that more will emerge in 2014. As the number of ACOs increases, it's more likely your practice will be approached about participating in one. Are you prepared to make a smart decision?

Here are three major considerations before joining an ACO: 

1. ACO participation contains an element of risk and reward

In broadest terms, an ACO is a group of providers (hospitals, practices, and/or other healthcare systems) working together to improve care quality while reducing care costs. If an ACO meets these objectives, its participants share the cost savings achieved. If not, participants may share in the losses.

In the Medicare Shared Savings Program, for instance, participants take on a one-sided risk model (sharing in 50 percent of cost savings realized when caring for Medicare patients); or a two-sided risk model (sharing in 60 percent of cost savings and/or losses).

Prior to participating in an ACO that includes a two-sided risk model, you need to weigh whether your practice can take a financial hit if it is unsuccessful.

2. ACO participation gives you (and requires you to take) a head start

As reimbursement shifts from volume (number of patients seen) to value (quality and cost of care provided) ACO participation could help ensure you are prepared for whatever the future brings, said Mark Wagar, president of Heritage Medical Systems, an affiliate of California-based Heritage Provider Network, which is also an affiliate of the Heritage California Pioneer ACO.   "The early ACOs are a wonderful training ground, if you will, for where healthcare overhaul is likely to head," he told Physicians Practice.

While ACO participation will help ensure your practice is prepared for other value-based reimbursement models, it will require your practice to make significant changes. Improving care coordination (within your practice and across your ACO partners), boosting patient engagement, and using technology to better track and monitor your patient population, are just a few of the top agenda items for ACO participants.

Before committing to an ACO, ensure you and your practice are ready to commit full force - and ready and willing to make the essential changes and investments. 

3. ACO participation forges (and requires forming) new partnerships

Participating in an ACO will require physicians and practices to partner with other healthcare systems, such as nearby practices and hospitals. That's a big consideration for independent practices that want to retain as much of their autonomy and independence as possible.

At the same time, forging new partnerships could actually help independent practices gain leverage, Kip Piper, a healthcare consultant in Washington, D.C., told Physicians Practice.

"There's a big pain to adapt from fee-for-service payment, to shared savings, to global fees, and so forth, but once you do, those physicians and those practices find out that they have a lot more newfound flexibility and autonomy to be able to move resources around and to make decisions in ways that are no longer sort of confined by the frankly artificial and somewhat arbitrary ways of fee-for-service payment," he said.

Another advantage of partnering up? You won't be left out in the cold. If other nearby practices partner with an ACO but your practice does not, you could be cut out of that ACOs referral network. 

As Rick Weil, a partner at Oliver Wyman and a member of the global consulting firm's Health and Life Sciences Practices told Physicians Practice earlier this year, "... There's going to be a huge incentive to keep the referrals within the ACO, so if you're a group in that market and you're still trying to play with everybody, I think you're going to see your referral volumes go down."