Navigating the ACO landscape: A guide for providers striving for value-based care

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In the ever-evolving healthcare landscape, primary care practices and federally qualified health centers are facing a significant shift as the Centers for Medicare & Medicaid Services (CMS) continues to push towards its goal that all Medicare Beneficiaries be under a value-based contract by 2030. Moreover, providers are faced with constant challenges in maintaining sustainable practices with ever increasing administrative burdens, staff shortages, and increasing operational costs. This has prompted a surge in interest among providers to join an accountable care organization (ACO) to access shared savings via new payment models. However, the crucial decision of which ACO to join requires careful consideration of various factors.

If they’re looking to join an ACO in 2025, practices should start their considerations well in advance so they can stay ahead of this year’s August 1st deadline for participation in CMS models in 2025. This timeline allows for comprehensive research and analysis, ensuring that practices align with an ACO that best suits their needs. ACOs can also have a lot of similarities on paper, but with a deliberate approach, providers can avoid the pitfalls of rushing into a decision and instead focus on understanding what each ACO offers, how they manage and operate, and speak to references within the network.

Finding the right program track

One of the initial considerations for providers is determining the type of ACO program that aligns with their practice, including, among others, the ACO Realizing Equity, Access, and Community Health (REACH) or the Medicare Shared Savings Program (MSSP), and the various tracks within each. Understanding the distinction between these two value-based programs is crucial for practices, particularly in how surpluses and deficits are calculated and the different payment models for primary care services (e.g. fee-for-service or monthly capitation payments). Additionally, providers must be aware that not all ACOs operate across both programs, with some exclusively offering ACO REACH or MSSP, or specific tracks in each, thus forcing providers into one of those programs rather than identifying which is best for the practice. Understanding the nuances of each program is essential for making an informed decision.

ACO features to evaluate

When evaluating potential ACOs, the duration of their existence, performance history, and how they share savings with practices become critical factors. Providers should delve into the specifics of each ACO's operation, such as their approach to risk adjustment – an area where many practices struggle. An ACO that offers services such as risk adjustment and care management can significantly benefit a practice navigating the complexities of value-based care.

Another vital consideration is the level of integration the ACO has with a practice's operations. While some offer guidance or more hands-off support, other ACOs offer staff and specific programmatic support. Providers should seek ACOs that actively engage with their practices, offering the right level of support and guidance as they transition to value-based care.

Breakdown of shared savings: Don’t let the numbers fool you

Understanding how costs are allocated to the practice and paid out of shared savings is equally important. The most lucrative ACOs for practices doing their due diligence on value-based care should start with an individualized performance evaluation and distribution of shared savings. In contrast to the common practice of pooling all funds and distributing them uniformly no matter the individual practice performance, some ACOs better reward high performers, providing them with a greater share of the surplus that they have helped earn.

What is better: 100% of $0 or 50% of $100,000? This is not a trick question, but many ACO providers are presented confusing information that makes simple concepts seem impossible to understand or compare on an apples-to-apples basis. Some example questions to ask when evaluating ACOs may include:

• Can you confirm if there are any fees charged to our practice?
• Please show us an example of an actual practice reconciliation (blinded) that includes:
  • Gross savings as calculated by CMS
  • Percent share of savings to CMS (e.g. 25% in MSSP Enhanced track)
  • Any expenses charged to the risk pool (if applicable)
  • Net savings to practice
• What is the length of commitment the ACO is requesting of your practice?
• Does your ACO agreement include any provision restricting your ability to sell your practice in the future?
• Does the ACO attempt to penalize the practice from leaving the ACO in future years?For example, by withholding earned savings from previous performance years the practice may have earned those savings prior to termination from the ACO?
• Is your ACO aligned to any specific hospital system, and if so, does it share any of the savings with that hospital?
• How does your ACO develop its projections?Or what vendor does the ACO use to develop those projections?What claims data timing and other assumptions were used to produce those projections?
• What percent of your ACO’s participating provider practices received shared savings in the most recent performance year you have data for?And what was the average per-member-per-month (PMPM) savings distributed to those practices, after any applicable expenses?

Provider and ACO engagement are keys to success

To maximize the benefits of being part of an ACO, providers and their care teams should be actively engaged in the process. A shift away from the traditional fee-for-service mindset is crucial, as practices that actively engage in value-based care and collaborate with their ACO tend to yield better outcomes. To be most successful, practices should view engagement as a two-way street, where the ACO actively supports practices in transitioning to value-based care and, in turn, providers invest more effort in enhancing their performance. It is important to ask questions to understand the level of engagement and transparency that the ACO will have with providers to ensure expectations on both sides are set early.

Engagement can take various forms, from considering risk adjustment codes to actively participating in recommended best practices. The more providers embrace this mindset shift and engage with the ACO, the more they stand to gain.

Making the best decision for your practice

The decision to join an ACO is a significant one for healthcare providers, particularly in the context of CMS's mandate for value-based contracts. By carefully considering factors such as the ACO program type, performance history, and level of engagement, providers can make informed decisions that not only benefit their practice financially but also contribute to the overarching goal of delivering better patient care in a value-driven healthcare landscape.

Scott Early, M.D. is a family physician and On Belay Health Solutions’ Co-Founder and Chief Medical Officer. Prior to starting On Belay, Dr. Early spent nearly 25 years working with Federally Qualified Health Centers as a Medical Director, Founding Residency Program Director, and Chief Medical Officer. Scott founded and continues to practice at Kronos Health, a Lawrence, MA -based practice delivering patient-centered, value-based care in a dramatically higher touch, higher impact primary care model.