Your practice + commercial payers = ACO success?

March 28, 2012

Two major health insurers announced the formation of accountable care organizations with primary care practices last week and it's the practices that benefit.

If recent activity is an indication, commercial payers may be interested in launching an accountable care organization (ACO) with your practice.

Two ACO-like organizations were announced last week, both of which financially reward physicians for improving chronic disease management benchmarks and lowering costs.

Health insurer Cigna and Fairfax Family Practice Centers, a primary care family medical practice based in northern Virginia, launched a “collaborative accountable care” partnership to improve health outcomes, lower total medical costs, and increase patient satisfaction, according to a statement from the organizations. The collaborative accountable care program has the same care quality improvement and cost reduction goals of an ACO, according to Cigna.

The program will include approximately 9,700 members covered by a Cigna health plan. They receive care from 100 healthcare professionals at 12 practice locations.

Fairfax Family Practice Centers will monitor and coordinate medical care. Registered nurses employed by Fairfax will serve as clinical care coordinators who will help patients with chronic conditions, identify patients discharged from the hospital who might be at risk for readmission, and assist patients who may be overdue for health screenings or skip prescription refills.

The care coordinators also will help patients schedule appointments and will provide health education. They may refer patients to Cigna’s clinical programs-such as disease management programs for diabetes, heart disease, and other conditions-and lifestyle management programs for tobacco cessation, weight management, and stress management.

In addition to providing medical care fees, Cigna will compensate the Fairfax physicians for the care coordination services, representatives said. The practice also may be rewarded through a “pay-for-performance” structure if it meets targets for improving quality and lowering medical costs.

Practices will receive a care coordination payment that may increase annually based on past performance, Dick Salmon, MD, Cigna national medical director for performance measurement and improvement, says in an email to Medical Economics eConsult.

“Given that some experts feel that as much as 30% of healthcare services are avoidable (taking good care of diabetes patients so they don't need hospitalization) or unnecessary (not ordering expensive diagnostic tests that don't change the treatment plan), a physician group potentially can earn substantial reimbursement increases," Salmon writes.

Salmon would not disclose how much additional compensation a physician could earn.

In Westchester County, New York, the Westmed Medical Group, a 220-physicain multispecialty practice, formed an ACO with insurer UnitedHealthcare.

Like the Fairfax collaboration, Westmed physicians will be measured and rewarded based on quality health outcomes, patient satisfaction, and reduction of medical costs in the Westchester market to below current, trend-adjusted levels. Bonus eligibility requires that both care quality and cost metrics are achieved, according to a statement from the organizations.

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