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San Francisco Marin Medical Society Blog

Accountable Care Organizations and Medical Foundations: Opportunities and Risks with New payment models

CMA recently held a forum on Accountable Care Organizations (ACOs) to educate members and physician leaders on this important, emerging model of care that is being encouraged by federal health care reform legislation.

Under the new law, groups of physicians who see Medicare patients and agree to work together - meeting certain government requirements to qualify as an ACO - would be eligible for bonuses if they meet spending benchmarks for caring for their patient population and other criteria.

Many in the health care industry see ACOs as opportunity to capitalize on health reform, realign and boost overall cost effectiveness, but exactly how ACOs will work remains unclear, as the federal government still must spell out regulations.

Hospitals have taken an interest in ACOs, and aligning themselves under the structure, because it also helps them take advantage of other federal reforms, such as bundled payments for episodes of care and incentives to innovate. However, hospitals cannot qualify as an ACO without partnering with physicians.

The law says the federal government must establish an ACO program designed to improve quality and cost efficiency of care for Medicare fee-for-service beneficiaries by Jan. 1, 2012. This is aimed at Medicare Part A, which concerns hospitals, and Part B, which concerns physicians. "People ask themselves, why is there such a rush now to make changes and start new programs?" CMA Legal Counsel Francisco Silva said. "The reason being to start an ACO, the way it is structured, it is going to take awhile. You've got to fund it, you've got to capitalize it and there's some long-term planning that has to be done."

The federal government is using ACOs to reform payment and delivery of health care. Even if physicians don't believe joining an ACO is for them now, they should be aware of how ACOs develop and how they affect the marketplace, Silva said. There is an industry drive for accountability of cost and care, and if physicians don't get on board, others, such as health plans, will set the rules. Some experts believe ACOs offer physicians a great opportunity to take charge of accountability of cost and care issues.

ACOs can come in many shapes and sizes, and there is no one size fits all. Some are merely a collection of Independent Practice Associations (IPAs) that are clinically integrated. Others are foundations set up by hospitals. Before signing onto any ACO, physicians should get expert advice. Contact CMA at (800) 786-4262 for guidance or to be directed to other experts.

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