What Is the Purpose of an Accountable Care Organization?

Accountable Care Organizations (ACOs) were introduced by CMS, through their innovation arm of the Center for Medicare and Medicaid Innovation (CMMI), as a value-based contracting model aimed at improving care while lowering costs. ACOs have continued to evolve with the latest iteration, the ACO Realizing Equity, Access, and Community Health (ACO REACH), being launched on January 1, 2023, as a replacement for the Global and Professional Direct Contracting (GPDC) models. ACO REACH has a strong focus on health equity and empowering communities. CMS’ goal is, by 2030, to have all Medicare beneficiaries under some value-based payment arrangement, whether that be Medicare Advantage, ACOs, or other value-based models, replacing “traditional” fee-for-service Medicare completely. 

What does this mean for providers?

One of the greatest strengths of ACOs is that the power of decision-making is shifted from the insurance company to the providers themselves. Clinicians are given the opportunity to design the care models that will create the change that is being sought, as well as flex those care models around the individual needs of their patients. Focus moves from generating the high-return episodes of care, like hospital admissions or unnecessary testing and procedures, and now can support the proactive, interdisciplinary, community-based care that improves outcomes and patient satisfaction. And, when those new strategies do generate improvements in clinical outcomes and overall costs, the providers themselves share in the savings generated. 

Three Ways to Engage with ACOs

There are three ways for providers and provider organizations to engage with ACOs. First, they can form an ACO themselves. While this maximizes return and control, it requires very large scale, heavy administrative burden, and a certain level of financial risk. Many organizations seek out this route only after forming extensive clinical coalitions. Second, they can become participating members of an existing ACO. This can provide a certain level of influence and a higher return on success but restricts the providers to only working with that one ACO and does require a greater level of patient engagement. Third, providers can contract with an ACO to provide a specific service and/or be a preferred provider for referrals. While this is a somewhat ancillary role for the organization, the provider can work with as many ACOs as desired. Whatever the best path is for any provider, working within a value-based model such as an ACO is becoming no longer optional, but is quickly becoming mandatory for growth and sustainability.

Visit the Acclivity ACO page for more information and helpful resources.

Source Material:

“Building a Palliative Care-Focused ACO” by Jim Parker, posted by Hospice News on September 22, 2023 and accessible at: https://hospicenews.com/2023/09/22/building-a-palliative-care-focused-aco