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Participating in an ACO Cheat Sheet (DRAFT) by [deleted]

Top tips for participating in an accountable care organization

This is a draft cheat sheet. It is a work in progress and is not finished yet.


Accoun­table Care Organi­zations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together volunt­arily to give coordi­nated high quality care to their Medicare patients.

The goal of coordi­nated care is to ensure that patients, especially the chroni­cally ill, get the right care at the right time, while avoiding unnece­ssary duplic­ation of services and preventing medical errors.

Post-acute organi­zations that serve seniors are increa­singly being faced with payors offering “value­-based” contracts and fewer fee-fo­r-s­ervices contracts.

Many states are implem­enting Medicaid managed care programs to reduce their costs. Since the ACOs and other payors are focusing on value-­based contra­cting, post-acute care providers must factor in the following:


1. Show you are cost-e­ffe­ctive and efficient (reduced unit price).
2. Show you have full services (home care, rehab, subacute Medicare, case manage­ment).
3. Establish protocols and practices to reduce hospital readmi­ssion.
4. What services are you contra­cting to provide, and at what price?
5. What policies and procedures of the payor are being incorp­orated into the contracts?
6. How you establish that higher quality is being provided.
7. How you and the payor establish that you are a lower-cost provider.
8. Under the contract, do you share in the costs-­saving bonuses or increased payments received by the payor, and do you share in the risk if there are no cost savings?
9. Do you help the payor establish cost saving or readmi­ssion reducing protocols, or establish other wellness outcomes by patient popula­tions?
10. Should you become a part owner of the ACO and/or have a repres­ent­ative serve on the board of directors?
11. Can you help design how an ACO or provider keeps its data?
Undert­aking risk-s­haring and value-­based contra­cting with payors will increase in importance and the process for such contra­cting should not be taken lightly.

Medicare offers several ACO programs:

Medicare Shared Savings Program—a program that helps a Medicare fee-fo­r-s­ervice program providers become an ACO. Apply Now.
Advance Payment ACO Model—a supple­mentary incentive program for selected partic­ipants in the Shared Savings Program.
Pioneer ACO Model—a program designed for early adopters of coordi­nated care. No longer accepting applic­ations.


Initiative Details: Advance Payment ACO Model

Selected organi­zations received an advance on the shared savings they are expected to earn. Partic­ipating ACOs received three types of payments:
An upfront, fixed payment: Each ACO received a fixed payment.
An upfront, variable payment: Each ACO received a payment based on the number of its histor­ica­lly­-as­signed benefi­cia­ries.
A monthly payment of varying amount depending on the size of the ACO: Each ACO received a monthly payment based on the number of its histor­ica­lly­-as­signed benefi­cia­ries.
Advance payments were structured in this manner to acknow­ledge that new ACOs will have both fixed and variable start-up costs.

Model Details: Pioneer ACO Model

The payment models tested in the first two years were a shared savings payment policy which had generally higher levels of shared savings and risk for than levels proposed in the Medicare Shared Savings Program. In the third year of the program, partic­ipating ACOs that showed a specified level of savings over the first two years were eligible to move a substa­ntial portion of their payments to a popula­tio­n-based model. These models of payments were also flexible to accomm­odate the specific organi­zat­ional and market conditions in which Pioneer ACOs worked.

Shared Savings Program

Providers and suppliers (e.g., physic­ians, hospitals, and others involved in patient care) an opport­unity to create a new type of health care entity.. An ACO agrees to be held accoun­table for the quality, cost, and experience of care of an assigned Medicare fee-fo­r-s­ervice (FFS) benefi­ciary popula­tion. The Shared Savings Program has different tracks that allow ACOs to select an arrang­ement that makes the most sense for their organi­zation.

The Shared Savings Program is an altern­ative payment model that:
Promotes accoun­tab­ility for a patient popula­tion.
Coordi­nates items and services for Medicare FFS benefi­cia­ries.
Encourages investment in high quality and efficient services.