Confused About Ophthalmologists' Place in ACOs? Here's Help

Neil Chesanow


April 10, 2014

In This Article

ACOs Are Causing Widespread Alarm

Ophthalmologists across the country are increasingly concerned about the spread of Accountable Care Organizations (ACOs), both Medicare and commercial, and what they mean for ophthalmic referrals in the future.

Consultants and attorneys with ophthalmic practices as clients, as well as ophthalmic practice administrators, say that many smaller practices are consolidating or considering it, hoping that an expanded patient base will make them more appealing for ACO membership, not only to protect their flow of patients but also to be eligible for bonuses if savings are achieved.

Separate but related issues are intertwined in these concerns. It's easier to gain a perspective on each of them if they are disentwined and viewed individually. Some fears may be premature or tempests in teapots, experts say; others are a greater cause for alarm. Which is which? Let's take a look.

Understanding Medicare ACOs

ACOs are intended to improve patient outcomes and reduce costs by better managing and coordinating care for a defined population of Medicare beneficiaries. The total number of Medicare ACOs is now 366.[1]

Hospitals, insurers, and physician organizations, which have formed Medicare ACOs, have also formed commercial ACOs for their non-Medicare members. The total number of all ACOs, both public and private, is 606.[1] ACOs now exist in all 50 states and the District of Columbia.[1] California has the most ACOs of either type (58), followed by Florida (55) and Texas (44).[1] The cities with the most ACOs are Los Angeles (26), Boston (23), and Orlando (17).[1]

To encourage Medicare ACO participation, the Centers for Medicare & Medicaid Services (CMS) established 2 voluntary initiatives: the Medicare Shared Savings Program and the Advance Payment Model.

In the Shared Savings Program, which is the one relevant to most doctors, providers are responsible for the care of at least 5000 Medicare beneficiaries for a period of 3 years on a fee-for-service basis.

The Advance Payment Model provides support for small rural and other small physician groups to invest in the infrastructure and redesign of care processes to form Medicare ACOs by offering funding up front.

An ACO can contract with CMS in one of 2 ways. In a "1-sided" arrangement, ACO providers receive their normal Medicare reimbursement, plus they share in the savings -- but not the losses, if any -- incurred by the ACO in meeting CMS quality outcomes targets. This lets doctors experiment and learn without getting burned, because a template for establishing a successful ACO doesn't exist yet.

After 3 years, to continue to participate as a Medicare ACO, the ACO must move to a "2-sided" arrangement, in which ACO providers incur downside risk but also stand to earn more in bonuses if they achieve savings and meet quality targets.


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