ACO: The Next Big Shift For Healthcare Organizations

Accountable Care Organizations (ACOs) have been in the news since the Patient Protection and Affordable Care Act (PPACA, ACA or healthcare reform) was signed into law in March 2010, garnering a considerable amount of attention over time. An accountable care organization (ACO) is a type of payment and delivery reform model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients.

ACO final rules were published in October, 2011. These final regulations heeded the concerns expressed during the comment period and eased many of the earlier requirements. Following the final rule, HHS announced late last year the 32 health organizations that will take part in the Pioneer ACO initiative. The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years. HHS explained that the Pioneer ACOs span 18 states and will improve care for as many as 860,000 Medicare beneficiaries – with the first performance period beginning January 1, 2012.

While the ACO model is designed to be flexible, three core principles are a must for all ACOs. The result is a clearly articulated plan, high level project timelines, requirements and gap analysis, and strategies to achieve both the short-term and long-term goals for clinical integration, clinical performance optimization, and creation of a sustainable integrated delivery system.