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Accountable Care Organizations Focus on Care Coordination and Quality Delivery to Help Medicare Reduce Costs

By Richard Lucibella, MHS, MBA – CEO and Director of Accountable Care Options, LLC

Is your practice ready for the next wave in Medicare – Accountable Care Organizations (ACO)? For providers that can deliver high-quality care and produce the documentation to prove it, the patient outcomes and financial rewards of an ACO can be extraordinary.

ACOs coordinate care for Medicare and commercial patients to a much greater extent than traditional practices that participate in government and private insurer plans. ACOs are tasked with preventing illness and cutting down on duplicate tests and services, while reducing medical errors. Teamwork produces results, and Medicare rewards health care providers through the Medicare Shared Savings Program.

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How do you know your practice is right for the program? First, understand that not all ACOs are alike. The primary care physicians in our group receive 70 percent of any Shared Savings and our ACO receives the other 30 percent. Medicare fee-for-service revenue is not affected, and our practice partners continue to receive 100 percent of their traditional Medicare revenue directly from the Centers for Medicare & Medicaid Services (CMS). That’s a no-risk proposition that most practices like.

However, not all practices are suitable candidates for an ACO. Some are simply not ready for the additional documentation, commitment to electronic medical records and patient coordination that must take place in a successful ACO.

In many ways, ACOs are practicing medicine the way physicians agree it should be practiced. Traditional Medicare has rewarded service volume; the more frequently a patient is seen, the more tests performed, the higher the revenue. Today, the incentives focus increasingly on outcome measures: Did the patient receive a screening colonoscopy or mammogram? Did the primary care physician address the results in the chart?  Was the patient’s diabetic condition properly controlled?  Have hospitalization readmissions increased or decreased?

As a result, ACO primary care physicians find themselves practicing the medicine for which they were trained, rather than acting primarily as acute care providers and triage centers.  The approach allows primary care physicians to re-establish their appropriate roles as health managers and care coordinators. For the first time in decades, physicians are being paid to sit down with the patient, obtain a full update on his or her acute and chronic conditions and develop a comprehensive plan for treatment and management. Hence, quality measures are directly aligned with cost efficiency. When physicians are rewarded for focusing on outcomes, patient and insurer costs are simultaneously brought into line.

Medicare evaluates – and pays ACOs – on how well they improve the health of patients and how well they document those improvements. For example, quality measures might include success at reducing LDL levels or effective education of patients with newly acquired conditions, such as diabetes or COPD. In all, there are 33 quality measures and each of them counts toward the ACO’s Shared Savings bonus.

Since July 1, 2012, when Accountable Care Options entered the Medicare Shared Savings Program, the number of Medicare ACOs nationally has actually tripled from 112 to 360, but not all of them qualified for a Shared Savings bonus. Achieving success requires a capable team of physicians, healthcare administrators, coding and practice management experts and close monitoring and coordination of the practices.

At the physician’s office level, a key strategy for success is properly training medical practice staff to work toward outcomes. Some practices are concerned that staff costs will rise, but staff members are often enthusiastic about the opportunity to do more with their educations. Medical assistants didn’t go to school just to take height, weight and blood pressure measurements. They want to educate patients and support the physicians in the practice; with proper training, they can help the practice improve patient outcomes and reach Medicare-dictated goals.

The payoff can be seen in healthier patients and healthier provider bottom lines. After 18 months (year one) of operation, South Florida-based Accountable Care Options, LLC achieved a 100 percent Quality Score and saved Medicare $12.7 million. This resulted in our ACO receiving Shared Savings of $6.25 million from Medicare, 70 percent of which was split amongst our 19 Internal Medicine and Family Practice partners.  The average was $225,000 for each practice, or $750 per Medicare patient. This was in addition to the physicians’ regular Medicare payments.   

There’s no guarantee that our ACO or any other will achieve that success every year. But the opportunity to practice better medicine and be rewarded for it is clearly there.

Richard Lucibella, MHS, MBA is the CEO and director of Accountable Care Options, LLC. Mr. Lucibella earned a master’s degree in health science from Johns Hopkins and a master’s degree in business administration from the Wharton School. He began his career with the Health Care Financing Administration (Medicare) and was directly involved in the original Medicare HMO risk projects. Mr. Lucibella has been active in South Florida Medicare risk programs since the mid-1980s.

Healthcare Business Today is a leading online publication that covers the business of healthcare. Our stories are written from those who are entrenched in this field and helping to shape the future of this industry. Healthcare Business Today offers readers access to fresh developments in health, medicine, science, and technology as well as the latest in patient news, with an emphasis on how these developments affect our lives.

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