Although the Centers for Medicare and Medicaid Services approved 32 “pioneer” Accountable Care Organizations under the Affordable Care Act, these programs have been around for years.

According to Jill Sackman, DVM, Ph.D, of Numerof & Associates in St Louis,“… accountable care existed long before it was written into the ACA because academic health economists have long supported the concept. Most of the 32 current CMS demonstration projects, known as Pioneer ACOs, have been based in academic medical centers.” Sackman said that results are mixed so far.

An ACO is a group of providers including hospitals, doctor and other providers that join together to meet the goal of coordinated care that is of top quality to their patients. For the pioneer ACOs, the primary reason for their existence is Medicare patients.

The reason that Medicare is the top moving agent for Accountable Care Organization is that payments to them are based on the quality of care, not the volume of care. According to Senior Housing News:

ACOTurtle“HHS set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as ACOs or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value-Based Purchasing and the Hospital Readmissions Reduction Programs.”

Janet Marchibroda, health innovation director and executive director of the CEO Council on Health and Innovation at the Bipartisan Policy Center, said there’s support for such a movement on both sides of the aisles in Congress.

“There is considerable bipartisan support for moving away from fee for service toward alternative payment models that reward value, improve outcomes, and reduce costs,” she said.

For the feds, Accountable Care Organization are the capstone of their plans to pay based on the quality of care while keeping costs low.

There is no real consensus in the ambulatory surgery community if it is beneficial to become an ACO member. The overwhelming majority of Ambulatory Surgical Centers in the U.S. do not hold membership in an Accountable Care Organization. Some ASC companies want to be in at the start with their own seat at the bargaining table.

Yet, other ASC facilities belief that a “wait and see” attitude is more productive. After all, why go to the trouble of overhauling backend processes if ACOs fail?

Many ASCs are dipping a toe in the water before making a final decision. They do this by starting their relationship with a single specialty to see is the program is successful. If it is a financial success, they can add additional services.

Another path that an ASC can take when starting a relationship with an ACO, is to form a relationship for a single payer. If that proves successful, they can add payers as they move on. However, ASCs participating with an ACO may keep or grow market share.

The reason that many ASC owners want to test relationships with an ACO is because of the risk-sharing payment system between provider and insurer. Most Ambulatory Surgical Centers are risk averse and are ill-equipped to manage a risk-based payment system. They feel baby steps are in order. Nevertheless, the risk is manageable if the ASC does the following:

  • Make sure that payments will cover variable costs in the great majority of cases
  • Do not become exclusive, the contract should allow you to join any other ACO in the area.
  • Know your own costs. As long as you know your global expense, it is easier to negotiate acceptable rates to both parties.
  • Target the population served by the ACO. For instance, if the ACO is primarily for Medicare and your population of people over the age of 65 is small, it may not make any sense to join.

EHR communications are vital to the success of your ACO relationship, be sure your system and the ACO can communicate with each other.

A slow approach to joining an Accountable Care Organization seems to be the most sensible. The risk is limited, and you have the chance to understand in real-time how well you fit with any ACO.




abeo Management Corporation (abeo) serves as a leading source of revenue cycle management and practice management with a specialization in anesthesia. The company leverages its people, processes, and software to serve independent practices, surgery centers, hospitals and healthcare systems with a scope of services that include billing, coding, transcription, practice management, and business consulting.

Join Our Newsletter