Best Practices

ACOs: Position Your Practice to Succeed

By Bruce Maller

As we embark on the New Year, the accountable care organization (ACO) program is scheduled to take effect. Yes, final regulations for this daunting provision — embedded in the Patient Protection and Affordable Care Act — were recently issued and the program is scheduled to be rolled out January 1. For those who witnessed the early-to-mid 1990s attempt at “reforming health care,” ACOs sound eerily familiar.

During the Clinton administration, the threat of health care reform legislation caused many providers to form contracting groups comprised of hospitals and physician organizations that attempted to establish care standards and negotiate with third-party payers, including the federal government. This was done in an attempt to pursue the usual platitudes of controlling cost and improving the quality of patient care.

For the most part, these first-generation contracting vehicles — such as physician-hospital organizations, independent practice associations and physician practice management companies — met a timely (or untimely) death. The reasons are legendary; however, most organizations lacked the necessary leadership or capital to successfully implement their business plans. My view was that this wasn't necessarily a bad idea, but the timing and execution were poor.

So, it is fair to ask why things should be any different this time around. And, even if the result is different, should this really matter to you and your practice? As most eye surgeons know well, ophthalmologists left the mainstream hospital campus setting many years ago in most communities across the US. In fact, many surgeons “broke ranks” with the local hospital system, choosing to develop their own surgical facilities. In addition, many eyecare providers have gone “direct access” in their communities, bypassing the traditional primary care physician referral network.

Watchful Waiting

So, where does that leave us today? First of all, ACOs are being created as part of a larger legislative framework (Medicare Shared Savings Program). Although the initial focus of most ACOs will be with Medicare beneficiaries, I expect many organizations will leverage the significant investment in developing an ACO to pursue other contracting and consolidation strategies. Some might view this as a threat. I see it as a potential opportunity.

ACOs will be given responsibility to provide comprehensive care across the entire inpatient and outpatient spectrum, including ophthalmology. Many ACOs will elect not to “own” their lines of distribution but, instead, will simply contract with physicians and facilities that will provide care to affiliated beneficiaries. At the outset, payment or reimbursement models may not change. However, over time I expect ACOs to transfer or shift the financial risk and responsibility of patient care to affiliated providers.

While I suspect hospital and large health systems are likely to dominate the ACO landscape, I also expect the more successful ones to formally engage with local physician leaders in establishing reimbursement models and care guidelines. Although I would not be overly reactive to local ACO discussions, I think it would be unwise to turn a blind eye to these development activities. It is better to have a seat at the table in order to keep a close eye on organization and contracting discussions.

Here are a few additional comments and suggestions to keep in mind as the ACO landscape unfolds:

1. Continue efforts to measure the patient experience with your practice.

2. Where practical, participate in government or third-party incentive programs, i.e., PQRS, EMR, etc. These programs “force” a discipline on practices to gather data and report findings in an efficient manner.

3. Keep a close watch on the cost of providing care both in the clinic and surgical facility. These data will enable you to be proactive in meeting quality and cost data requirements likely to be adopted by ACOs.

4. Although national dialogue may be instructive, most action will occur within states and local communities.

5. As specialty care providers, ophthalmologists can participate in any number of ACOs. If possible, keep your options open. Do not limit participation to one organization — it is difficult to predict which ones will achieve success.

Unlike the failed contracting vehicles of the 1990s, I believe the ACO will achieve market “relevance.” Ophthalmology practices that offer a comprehensive range of services, including a low-cost surgical venue, will be best positioned to access ACO patients at a fair price. OM

Bruce Maller is president and CEO of BSM Consulting, an internationally recognized health care consulting firm. For more information about BSM and its resources, visit www.bsmcafe.com.