Accountable Care Organizations:
What are they ‘accountable’ for?

Dr Rachael Addicott
2011-12 Harkness Fellow
7 March 2013
Origins of ACO development

 Why was reform necessary?
 2010 Patient Protection and Affordable Care Act
 – Payment and provision reform to encourage
   cost savings and high quality care
 – Care management for Medicare and Medicaid
   populations
What is an ACO (in theory)?

 Coordination of care across a network of providers
 Interdependency: cost savings are more likely if
 partners work together
 Defined patient population
 Shared governance structure (ie. ACO Board)
 Shared accountability for quality and cost of care
 Shared risk and savings: on condition of meeting
 quality metrics
ACOs for Medicare patients

 Centers for Medicare and Medicaid Innovation
 (CMMI) testing the efficacy of the model

 – SHARED SAVINGS PROGRAM: ACO develops from a one-
   sided to a two-sided risk model
 – PIONEER: providers with more experience move to an
   accelerated population-based payment
 – ADVANCE PAYMENT: additional upfront support to
   developing ACOs, which is then recovered from any
   future savings
What is an ACO (in practice)?

 Origins in contracts for commercial populations
 History of risk sharing with health plans
 Driven by medical groups
 Challenges in engaging hospital partners
 Care management
 Payment models
 What do ACOs do with the savings?
Accountability for what?
 Finance, mostly through process measures
 Increasing focus on patient satisfaction
 Quality measures as they relate to process
 Measures “negotiated” with payer
  – Medicare: single set of 33 quality measures
  – More variation / overlap on commercial side
  – ACO has variable influence in negotiations
Monitoring performance

 Thresholds or targets are more contentious than
 the measures themselves
 – eg. keeping patients in the network
 Collaborative accountability
 – eg. patient satisfaction
 Risk modelling
Sanctions and consequences
 Reliance on informal influence
 Appeals to professional competitiveness
 Credibility of data
 Development and coaching – “learning opportunity”
 Financial penalties
 Removal from ACO network
Conclusion: Culture of collaboration

 Shared goals and incentives
  – Reliance on data transparency and peer influence
 Align measures and thresholds across payers
  – Compatible matrix of accountabilities
 Credibility and transparency of data
  – Investment in IT infrastructure

Rachael Addicott: Accountable Care Organizations: What are they 'accountable' for?

  • 1.
    Accountable Care Organizations: Whatare they ‘accountable’ for? Dr Rachael Addicott 2011-12 Harkness Fellow 7 March 2013
  • 2.
    Origins of ACOdevelopment Why was reform necessary? 2010 Patient Protection and Affordable Care Act – Payment and provision reform to encourage cost savings and high quality care – Care management for Medicare and Medicaid populations
  • 3.
    What is anACO (in theory)? Coordination of care across a network of providers Interdependency: cost savings are more likely if partners work together Defined patient population Shared governance structure (ie. ACO Board) Shared accountability for quality and cost of care Shared risk and savings: on condition of meeting quality metrics
  • 4.
    ACOs for Medicarepatients Centers for Medicare and Medicaid Innovation (CMMI) testing the efficacy of the model – SHARED SAVINGS PROGRAM: ACO develops from a one- sided to a two-sided risk model – PIONEER: providers with more experience move to an accelerated population-based payment – ADVANCE PAYMENT: additional upfront support to developing ACOs, which is then recovered from any future savings
  • 5.
    What is anACO (in practice)? Origins in contracts for commercial populations History of risk sharing with health plans Driven by medical groups Challenges in engaging hospital partners Care management Payment models What do ACOs do with the savings?
  • 6.
    Accountability for what? Finance, mostly through process measures Increasing focus on patient satisfaction Quality measures as they relate to process Measures “negotiated” with payer – Medicare: single set of 33 quality measures – More variation / overlap on commercial side – ACO has variable influence in negotiations
  • 7.
    Monitoring performance Thresholdsor targets are more contentious than the measures themselves – eg. keeping patients in the network Collaborative accountability – eg. patient satisfaction Risk modelling
  • 8.
    Sanctions and consequences Reliance on informal influence Appeals to professional competitiveness Credibility of data Development and coaching – “learning opportunity” Financial penalties Removal from ACO network
  • 9.
    Conclusion: Culture ofcollaboration Shared goals and incentives – Reliance on data transparency and peer influence Align measures and thresholds across payers – Compatible matrix of accountabilities Credibility and transparency of data – Investment in IT infrastructure