An Accountable Care Organization with a Personal Touch

Join the Medical Advantage ACO – And We’ll Cover the Downside Penalties

The Most Important Benefits of an Accountable Care Organization (ACO)

by | Jun 8, 2022

Joining an Accountable Care Organization (ACO) provides many benefits for patients and physicians, as a growing number of people have noticed. 

The Advantages of Joining an ACO  

Hospitals, medical providers, and a growing number of primary care physicians join ACOs that incentivize the delivery of high-quality healthcare. The Centers for Medicare and Medicaid Services (CMS) established the goal of coordinated care to ensure patients get the right care at the right time while avoiding unnecessary duplication of services and preventing medical errors. 

The number of doctors in primary care practices who belong to some type of ACO (commercial, Medicare, or Medicaid), was 54.9 percent in 2020, a 43.9 percent increase since 2016, according to a report by the American Medical Association

From 2016 to 2020, participation in commercial ACOs increased by 11 percent, (from 31.7 percent to 42.7 percent); in Medicaid ACOs by 9 percent (20.9 percent to 29.5 percent); and Medicare ACOS by 8.1 percent (28.6 percent to 36.7 percent).   

Commercial ACOs have at least one contract with a private payer (with or without Medicare or Medicaid contracts). They are also more likely to include one or more hospitals, and to be jointly led by physicians in one or more hospitals. In contrast, Medicare and Medicaid ACOs have contracts exclusively with either Medicare or Medicaid. 

Federal law limits the amount of money Medicaid beneficiaries can pay in copayments and premiums. Unless a state gets a waiver, those regulations apply to Medicaid ACOs, and unless waived, ACOs have to provide all of the federally required Medicaid benefits. 

Medicaid ACOs operate differently depending on the state. Some Medicaid ACOs are structured similarly to the Medicare ACO programs, with participating providers sharing in savings realized by meeting quality metrics and better-coordinated care. Other Medicaid ACOs are structured more like traditional Medicaid managed care, where health care plans manage an enrollee’s care, according to National Partnership’s report on Accountable Care

ACO benefits include reduced costs and higher quality of care, which is good for the practice’s bottom line and a patient’s overall health. It improves experiences system-wide, since both doctors and patients are motivated to resolve medical issues as quickly and efficiently as possible. The ACO approach keeps providers focused on improving care as well, which reduces hospital stays, prevents unnecessary  admissions, and reduces patient or physician efforts that aren’t focused on making people better.   

Better Care for Patients 

Improving the quality of care is always a plus for providers and patients, and ACOs create a financial incentive to encourage it. ACOs align payment with the quality and value of care administered, improving the timeliness, coordination, and quality of care provided to patients. As a common refrain in ACO literature goes, ACOs seek to keep their patients healthy by delivering the right care, in the right place, at the right time. 

Accountable care also points medical practices and practitioners toward developing innovative care integration and patient and family engagement. Under accountable care, doctors and health centers are encouraged to work together in an integrated approach to patient care, while also prompting better family involvement in care. Families motivated to engage in their members’ care often become active partners in care planning, improving the chances that health outcomes are achieved. 

Doctors in ACOs are motivated to prevent developing diseases and conditions in addition to attending to immediate needs. So, patients in ACOs may receive more preventive care earlier and more often than they would otherwise receive from a doctor.  

Movement towards Value-Based Care 

ACOs were created by the ACA (Affordable Care Act), signed into law in 2010, which sought to increase the value of the U.S. healthcare system, by providing value-based care.  

Under the ACO model, value-based outcomes are achieved by incentivizing healthcare providers to coordinate clinically-efficient care. Providers are eligible for financial bonuses when clinical care is delivered effectively, with demonstrated quality outcomes. Payment for delivered care is based on quality scores on dozens of clinical quality measures. The score providers receive determine if they are eligible for shared savings. 

ACOs allow providers to share the cost savings realized by effective, quality care with the government. However, as with fee-for-service payment models, ACOs are not at risk for increased Medicare spending for patient care.  

CMS is also developing value-based care models that do involve financial risk, such as the ACO Reach model, a replacement for the now-defunct risk-sharing Direct Contracting Entities (DCEs) under the Global and Professional Direct Contracting (GPDC) model.  

The updated approach to value-based care delivery joins ACOs, including the Medical Advantage ACO, with 40 providers in Michigan and Ohio, and Physician Organization (PO) models, including Medical Advantage’s CIPA+.   

Increased Healthcare Accessibility 

ACOs are charged with improving the quality of care, which can have a number of effects on healthcare accessibility.  

First, as quality improves, costs are expected to fall, allowing more people affordable access to care. Second,

Recent studies have associated patient portals with improved clinical health outcomes. Many patients showed significant decreases in office visits, fewer changes in medication, and better adherence to treatment for patients who used portals.  

Better Care Quality 

Similar to financial services fiduciaries, who are required to act in a customer’s best financial interests , providers enrolled in ACOs are part of a system oriented to reward high-quality care rather than racking up the number of treatments or accruing treatment expenses.  

As a result, the financial incentives are aligned with the practical and professional incentives to make a patient well quickly and efficiently.  

“Successful ACOs will balance the need to reduce costs with the need to improve quality and the overall care experience. ACOs hold great promise for achieving what the Institute for Healthcare Improvement calls the triple aim of health care: (1) improved indices of health and outcomes of care to determine population health status, (2) patient satisfaction with the care experience that involves more active patient engagement in their care, and (3) efficiency in the total cost of the care delivered,” according to the National Institutes for Health

Improved Care Coordination 

A key strategy in using ACOs to provide efficient, quality care is the coordination of care among multiple providers, specialists, and institutions.  

National Partnership notes care delivered in this fragmented fashion – in silos – prevents doctors from coordinating with each other when providing care. So, it often falls to the patient or their family members to bring all the disparate pieces together. Parents, significant others, and spouses must keep tabs on scheduling appointments, test results, and arranging useful consultations between specialists.  

ACOs are designed to fix this piecemeal problem by improving coordination and communication among health professionals who are dealing with the same patient. ACOs bring together health care delivery elements such as primary care, specialists, hospitals, and home health, and ensure that they all work together.  

“In an ACO, primary care physicians act as the quarterbacks, collaborating with other ACO providers across the spectrum of services to ensure that a patient receives the most appropriate care,” according to the National Partnership accountable care report

This coordination of care can manifest throughout the healthcare system in several ways: 

  • Managing transitions from an inpatient stay or an emergency department visit to patients’ homes in an effort to improve beneficiary outcomes. This also reduces instances of avoidable care, such as readmissions and additional emergency department visits. 
  • Developing strategies to manage chronic conditions. Poorly managed, these conditions can result in poor outcomes for beneficiaries and high health care costs.  ACOs depend on all members of care teams, from clinicians to support staff, to educate patients about their condition, promote effective self-care, and highlight available resources. 
  • Some health care systems and practices co-locate specialists and providers within the same building or office to make it easier for patients to quickly access care and for the providers to easily compare notes with each other. 
  • Using innovative partnerships to address patient transportation challenges, such as with a commercial ride-sharing company. 
  • Some ACOs go as far as creating care coordination teams to make sure it all works effectively. 

Making care coordination work well relies on electronic health records (EHR) to help physicians, specialists, and staff best coordinate care throughout the system.  

Sharing patient data through a common EHR allows ACOs to reduce unnecessary, redundant tests and procedures. By having all of a patient’s health data in one easily accessible place, ACO providers are better prepared.  

Hands-On Support and Assistance 

Navigating your practice’s first steps in joining an ACO requires a shift in the way your practice operates. That is, moving away from wasteful or unnecessary care toward a system that rewards what makes the best sense for patients and, ultimately, for your practice.  

The shift is also where the CMS plans to grow until it represents the majority of healthcare reimbursement. In addition to policy shifts employed by CMS, value-based care and ACOs are also being proactively adopted by an increasing number of private payers. Policy and competition will eventually move the bulk of care to value-based models. So, joining an ACO may soon make sense, even if the appeal of more efficient, better, and cost-effective care has not already convinced you.  

When you decide to join, having expert help will make the transition a much smoother experience.  

Medical Advantage Can Help 

Shifting to value-based care is daunting, especially for an independent practice. Medical Advantage offers a wide range of services to alleviate the burden of implementing value-based care. Starting with EHR optimization, our consultants can assist your practice in documenting care efficiently and accurately, ultimately improving Value Based Care performance.  

To learn more about implementing or optimizing value-based care in your practice, contact one of our consultants today.   

Contact us for more ACO membership information.


An Accountable Care Organization with a Personal Touch

Join the Medical Advantage ACO – And We’ll Cover the Downside Penalties