If you are like us, you are hearing more and more lately in the news and on the web about Accountable Care Organizations or ACOs.
In a nutshell, an Accountable Care Organization is a system or model of payment that encourages all healthcare organizations to get better at providing care and being efficient. The better they perform, the more reimbursement they will receive under the Medicare Shared Savings Program. ACOs have been introduced as part of the recent health reform law to help reduce the burden on the federal budget currently spent on healthcare. It is a shift in reimbursement for healthcare providers using performance based guidelines.
According to the Centers for Medicare and Medicaid Services (CMS), an ACO is “an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.”
What improvements are Accountable Care Organizations targeting?
Healthcare organizations will be judged on many fronts including customer satisfaction scores, readmission rates to the hospital, quality outcomes and lower costs. Currently as many as one in five Medicare patients who have been hospitalized are readmitted within 30 days. This need for more care often resulted from treatment that could be improved or coordinated more effectively.
These areas are being monitored by healthcare organizations using specific tracking criteria and tools with the results compared to other healthcare providers to determine who is achieving the desired results and who is not.
What will happen to the organizations that perform poorly?
These organizations will be at risk of losing funding from Medicare which accounts for a large percentage of revenue especially as the population continues to age. Currently more than half of the nation’s seniors have five or more chronic diseases requiring visits to these facilities. Most have more than one doctor which can often lead to duplication in services costing the system money. In the future, it could affect reimbursement from third party payers such as insurance companies who generally follow the lead of the government.
What affect will ACOs have on the healthcare industry?
Groups of healthcare providers will work together to manage and coordinate care for specific populations to be more cost effective and efficient when providing care. They will focus on specific types of care to a targeted group where they are better able to provide good care in a cost effective way. The providers will be held responsible for the outcomes of the care they deliver receiving ultimate rewards/reimbursement for excellent service to those who are judged to be leaders in the industry. They need to provide the highest care at the lowest cost through collaboration during transitions using best practices, technology investment, monitoring quality outcomes and focusing on community based services. Hospitals will not be reimbursed for re-admissions resulting from poor quality treatment that would result in needing more care. On the other hand, top performers will be reimbursed for services they do provide. Providers will have to accept more risk for the quality of care they provide-delivering good care will be rewarded and delivering inferior and inefficient care will not be rewarded.
How will this new model affect seniors?
The goal will be increased accountability for healthcare service providers across the continuum of care for optimum outcomes. This means that our seniors should be receiving improved care, coordinated and managed in a more efficient way than in the past. Hopefully it will result in a decreased burden on the federal government when healthcare organizations are more efficient.
There are still many unanswered questions about ACOs such as how the model will be put in place, how Medicare beneficiaries will be handled and assigned an ACO, who will collate and analyze the data required to decide which organizations are performing well and other rules governing its structure.
We will continue to follow the new reform law and how upcoming changes will affect our seniors so that you can keep up to date on the latest developments along with us.