Accountable Care Organization (ACO) Strategy

One of the main ways the Affordable Care Act seeks to reduce health care costs is by encouraging doctors, hospitals and other health care providers to form networks that coordinate patient care and become eligible for bonuses when they deliver that care more efficiently.

An Accountable Care Organization (ACO) is a network of doctors and hospitals that shares financial and medical responsibility for providing coordinated care to patients in hopes of providing quality care and eliminate unnecessary costs. In addition, Providers make more if they keep their patients healthy. About 6 million Medicare beneficiaries are now in an ACO, and, combined with the private sector, at least 744 organizations have become ACOs since 2011. An estimated 23.5 million Americans are now being served by an ACO.

ACOs make providers jointly accountable for the health of their patients, giving them financial incentives to cooperate and save money by avoiding unnecessary tests and procedures. For ACOs to work, they have to seamlessly share information. Those that save money while also meeting quality targets keep a portion of the savings. Accountable Care Organizations (ACO) are all about performance driven results due to the reimbursement structure.

  • There is a different set of reporting requirements for ACOs geared toward population health benchmarks.
  • Care Coordination is key to the successful management of an ACO.
  • Pay for Performance moves hospitals and providers away from the fee-for service model of reimbursement.
  • Bundled Payments and Medicare Shared Savings requires participants to reward providers based on overall cost savings.
  • Quality Improvement means ACOs will not receive all value based financial incentives unless they can demonstrate improvements in the population group they caring for each measurement period.
  • Payment Capitation limits the total amount available for the treatment of patients in an ACO.

The goal of the ACO is to eliminate unnecessary care and duplication of services. ACOs create incentives to be more efficient by offering additional reimbursement for providers when they reduce the overall cost of treating patients. Doctors and hospitals have to meet quality benchmarks that focus on chronic disease management and prevention.

How can HCIT Consulting assist with evaluating or creating an ACO?

  • Strategy: Understand the ACO and your marketplace.
      • Know the metrics & Key Performance Indicators: How does your organization track and report to the teams that need the feedback? (process, outcome, quality, cost, patient satisfaction)
  • Networks: Participate in payor and provider networks aligned with your provider referral base.
    • For your ACO to be successful you need to know what types of networks/health systems and payor contracts affect your organization. Understand how your organization can participate in these initiatives to support ACO performance requirements.
    • Have you prepared an analysis of the potential revenue and costs?
  • Infrastructure: Invest in the infrastructure to manage a payor Contract Portfolio and Patient Base, driven by volume based purchasing.
    • How does your organization work with referring physicians and affiliated hospitals to improve quality and lower cost (i.e., Clinical Integration Programs, ACOs, “Medical Home” models); your performance can affect their performance and reimbursement/incentives.
  • Communication: Communicating to physicians and your patient base.  This drives the Patient Satisfaction scores the most.
  • Expansion: Assess opportunities increase revenue and increase market share.


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