PTPN Insights

What PTs need to know about ACOs.

November 26th, 2012 |

What PTs need to know about ACOs.As healthcare providers try to make sense of the Patient Protection and Affordable Care Act (ACA), the healthcare bill passed in 2010 and upheld by the Supreme Court earlier this year, we’re all doing our best to understand the parts of the bill that could most affect us. One element of reform that will affect many providers, including physical therapists, is Accountable Care Organizations, otherwise known as ACOs.

Many therapists may find it difficult to decipher what their role will be in ACOs, because their role is not spelled out in detail in the legislation, or even in the implementation of ACOs that has already occurred. In this post, PTPN President Michael Weinper, PT, DPT, MPH, and Jerry Connolly, PTPN’s lobbyist in Washington, D.C., share their insights on ACOs and what therapists may expect.

What are ACOs?

The overriding goal behind the ACA was to improve a system that had no central control. Patients often consult with several doctors that have little to no communication, who could prescribe conflicting medications and programs and often confuse the patient. As Dr. Donald Berwick pointed out in a New England Medical Journal last spring, “Because in many settings no single group of participants — physicians, hospitals, public or private payers, or employers — takes full responsibility for guiding the health of a patient or community … integration among them may be deficient. Fragmentation leads to waste and duplication — and unnecessarily high costs.”

In response, Congress felt the need to encourage a system that seamlessly coordinates care and incentives accordingly. With the formation of ACOs, doctors, hospitals and other healthcare providers will come together voluntarily to coordinate high-quality care for Medicare patients. Jerry says that the goal behind such coordinated care is to “ensure that patients, especially the chronically ill, get the right care at the right time, without unnecessary duplication of services or medical errors.” He adds, “When an ACO succeeds in delivering both high-quality care and spending healthcare dollars more wisely, it will share in the savings it achieves for the Medicare program.”

While savings will be measured through the program, it is important to note that the quality of care delivered will also factor into the funds shared with providers in such ACOs. Earlier this year, PT in Motion pointed out that CMS has named 4 areas of quality measures:

  • Patient experience
  • Care coordination and patient safety
  • Preventive health
  • Caring for at-risk populations

To calculate the funds redistributed to the ACOs, CMS will combine savings of healthcare dollars and the quality of care delivered, placing an emphasis on both factors.

How do ACOs work?

An ACO is an organization of healthcare providers that agrees to be accountable for the quality, cost and overall care of Medicare beneficiaries enrolled in the traditional fee-for-service program who are assigned to it. ACOs must include primary care physicians, but may or may not include other physician specialties or hospitals. (An important note from the PT in Motion article: “Physical therapists (PTs) can’t create ACOs, but all Medicare providers — including PTs — can participate in them.”)

ACO providers will continue to be paid under the current Medicare fee-for-service formulas, but they will have additional bonuses based on quality of care and cost savings. Providers will have a choice between two options as to how to collect such bonuses:

  • Share only savings with CMS. ACOs would get up to 50% of the money saved by the collective at the end of the ACO’s three-year cycle.

  • Share both savings and losses with CMS. ACOs who choose the riskier model could receive up to 60% of the money saved by the group.

Some private healthcare plans are also testing ACO-like arrangements with private sector (non-Medicare) beneficiaries. Initiatives have sprung up across the country, with companies like ProviDRs Care Network of Kansas, Tucson Medical Center in Arizona, CIGNA in Atlanta, and Blue Cross Blue Shield of Illinois all testing some sort of ACO arrangement.

Should I consider joining an ACO?

An ACO in one market may look and act much differently from an ACO in another market. Jerry advises, “Private practice therapists will necessarily be required to conduct an individual analysis of the factors present in any given locale.” (Note: PTPN is exploring options to participate with ACOs in our network states; PTPN members are invited to contact their local PTPN offices with questions about local ACOs.)

Therapists who have a history of providing high-quality, low-cost services will be in a good position to join an ACO. If they have data that back up such reputations, even better. This is why Michael recommends the use of “provider report cards,” which can be created from data collected by outcomes measurement systems like the PTPN Outcomes Program, to demonstrate performance. “The idea,” he says, “is that if you can demonstrate [how you provide quality care for] patients, you will be rewarded.”

Because primary care physicians (PCPs) are a key component of ACOs, PTs will need to consider working closely with PCPs in order to join such organizations. Jerry points out that therapists can offer many advantages to such physicians, from prevention to early intervention, to collegial, inter-referral relationships. And while many PCPs may understand the broad range of knowledge held by PTs, physical therapists would do well to consider using provider report cards and outcomes data to market their outcomes to PCPs and ACOs for consideration.

Whether PTs decide to join an ACO, they should remember that where Medicare goes, most payers will follow. “The fact that ACO-like organizations are growing rapidly in the private, non-Medicare sector,” says Jerry, “is a sign that it will be a model to contend with for some time, regardless of which policymakers may be in control of Medicare’s future.”

Want to know more about ACOs? Request our free white paper by Jerry Connolly, Coping With Accountable Care Organizations: What Private Practice Therapists Need to Know.

Printable version.

For further reading:

Supreme Court upholds Affordable Care Act. PTPN, June 28, 2012.

Sherwin, Jane. Contemporary topics in healthcare: Accountable Care Organizations. PT in Motion, February 2012.*

Berwick, Donald M. Launching Accountable Care Organizations — the proposed rule for the Medicare shared savings program. New England Journal of Medicine, April 21, 2011.

* Used by permission from PT in Motion.