TRENDS
ACOs: Still Standing Reducing ‘unnecessary care’ is key to their success
Experts are convinced that to preserve our healthcare system, the U.S. must
Program is tweaked
move away from fee-for-service to a managed care model. They argue that doing things
The first ACO program – the Pioneer
the old way – that is, rewarding healthcare providers for performing more procedures
ACO – was launched by the Centers
and shielding consumers from the full financial impact through insurance – leads to
for Medicare & Medicaid Services In-
a bigger national healthcare bill. And they point to statistics indicating that despite all
novation (CMMI) Center in 2012. The
the money spent on healthcare, Americans aren’t all that much healthier – and in many
ACO model has since been adopted by
cases, are less healthy – than people in countries that spend less.
Medicaid and even commercial payers. In fact, McKinsey & Company reports that of the roughly 33 million lives
Their solution is better care manage-
receive the right care at the right time, while
covered by ACOs in 2018, more than
ment, with an emphasis on wellness,
avoiding unnecessary duplication of ser-
50% were commercially insured and ap-
prevention, coordination of services, and
vices and preventing medical errors.
proximately 10 percent were Medicaid
management/monitoring of people with
In an ACO, physicians and hospitals
lives. CMS has been tweaking the ACO
chronic illnesses. And right now, account-
assume responsibility for the total cost of
program ever since the Pioneer days by
able care organizations, or ACOs, are the
care for a given patient population. When
resetting benchmarks, quality goals and
leading model.
an ACO succeeds in delivering high-qual-
risk arrangements.
ACOs are part of the Medicare Shared
ity care and spending healthcare dollars
In January 2016, CMMI launched
Savings Program, which was established by
more wisely, its participants can share in
the Next Generation Accountable Care
the Affordable Care Act of 2010. ACOs
the savings achieved on behalf of the
Organization (NGACO), designed to
are groups of doctors, hospitals and other
Medicare program. Increasingly, ACOs
test whether stronger financial incen-
healthcare providers who voluntarily join to
are required to pay back some Medicare
tives, paired with tools to support patient
give coordinated, high-quality care to Medi-
dollars if they fail to meet certain quality
engagement and care management, could
care beneficiaries and ensure that people
goals or financial benchmarks.
improve health outcomes and lower expenditures for Medicare fee-for-service beneficiaries, according to McKinsey. A key attribute of the NGACO model was a higher level of shared financial risk and reward than what was available under other Medicare ACO models. In 2018, ACO participation dipped when the Trump Administration launched “Pathways to Success,” whose intention was to push ACO participants to take on downside risk after just two years in the program. (When the Medicare Shared Savings Program began in 2012, ACOs had six years of one-sided risk – that is, the potential to share savings without
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December 2021 | The Journal of Healthcare Contracting
