Navigating the ACO landscape: A guide for providers striving for value-based care

Primary care practices are facing a significant shift as the Centers for Medicare & Medicaid Services (CMS) continues to push toward its goal that all Medicare beneficiaries be under a value-based contract by 2030.

Moreover, providers are faced with constant challenges in maintaining sustainable practices with ever-increasing administrative burdens, staff shortages and increasing operational costs. This has prompted a surge in interest among providers to join an accountable care organization (ACO) to access shared savings via new payment models. However, the crucial decision of which ACO to join requires careful consideration of various factors.

ACO features to evaluate

When evaluating potential ACOs, the duration of their existence, performance history and how they share savings with practices become critical factors. Providers should delve into the specifics of each ACO’s operation, such as their approach to risk adjustment, an area where many practices struggle. An ACO that offers services such as risk adjustment and care management can significantly benefit a practice navigating the complexities of value-based care.

Another vital consideration is the level of integration the ACO has with a practice’s operations. Although some offer guidance or more hands-off support, other ACOs offer staff and specific programmatic support. Providers should seek ACOs that actively engage with their practices, offering the right level of support and guidance as they transition to value-based care.

Breakdown of shared savings: Don’t let the numbers fool you

Understanding how costs are allocated to the practice and paid out of shared savings is equally important. The most lucrative ACOs for practices doing their due diligence on value-based care should start with an individualized performance evaluation and distribution of shared savings. In contrast with the common practice of pooling all funds and distributing them uniformly no matter the individual practice performance, some ACOs better reward high performers, providing them with a greater share of the surplus they have helped earn.

Which is better: 100% of $0 or 50% of $100,000? This is not a trick question, but many ACO providers are presented with confusing information that makes simple concepts seem impossible to understand or compare on an apples-to-apples basis. Some example questions to ask when evaluating ACOs may include:

• Can you confirm whether there are any fees charged to our practice?
• Can you show us an example of an actual practice reconciliation (blinded) that includes:
  • Gross savings as calculated by CMS?
  • Percentage share of savings to CMS (e.g., 25% in the MSSP ENHANCED track)?
  • Any expenses charged to the risk pool (if applicable)?
  • Net savings to practice?
• What is the length of commitment the ACO is requesting of your practice?
• Does your ACO agreement include any provision restricting your ability to sell your practice in the future?
• Does the ACO attempt to penalize the practice for leaving the ACO in future years? For example, by withholding earned savings from previous performance years, the practice may have earned those savings prior to termination from the ACO.
• Is your ACO aligned to any specific hospital system, and if so, does it share any of the savings with that hospital?
• How does your ACO develop its projections? What vendor does the ACO use to develop those projections? What claims data timing and other assumptions were used to produce those projections?
• What percentage of your ACO’s participating provider practices received shared savings in the most recent performance year you have data for? What was the average per-member-per-month savings distributed to those practices, after any applicable expenses?

Making the best decision for your practice

The decision to join an ACO is a significant one for health care providers, particularly in the context of CMS’ mandate for value-based contracts. By carefully considering factors such as the ACO program type, performance history and level of engagement, providers can make informed decisions that not only benefit their practice financially but also contribute to the overarching goal of delivering better patient care in a value-driven health care landscape.

Scott Early, M.D., is a family physician and On Belay Health Solutions’ co-founder and chief medical officer.