Julian D. 'bo' Bobbitt Jr, JD

A new report finds that 49% of surveyed primary care physicians expect to participate in an accountable care organization in the next year. Twenty percent already are in ACOs, and most of them are contracting with commercial payers and Medicaid.

Why this dramatic jump? At the end of the day, it is all about the shift from volume-based reimbursement (fee for service) to value-based reimbursement. ACOs are a means to an end, not the end itself. If we will get paid for squeezing waste out of our current system and look at the best way to do it, the elements of an ACO logically fall into place.²

We attribute the big jump in primary care participation to three main factors:

1. Primary care will drive value.

The highest-impact targets for ACOs are:

• Prevention and wellness.

• Chronic disease management.

• Care transitions and navigation.

• Reduced hospitalizations.

• Multispecialty care coordination of complex patients.

While not a monopoly of primary care, all of these opportunities are in your wheelhouse. That is why the Medicare Shared Savings Program ACO regulations correctly require every ACO to include primary care providers. Consequently, primary care providers are being heavily recruited by ACOs.

2. Primary care will derive benefits.

Most ACOs are compensated by receiving some percentage, usually 50%, of savings for a patient population if quality and patient satisfaction metrics are also met. For an ACO to be successful, distribution of savings should be in proportion to their contribution. Primary care physicians should contract only with ACOs that recognize this fundamental connection.

The distribution must be an incentive for every participant to contribute as much value as possible. That will not happen unless the savings distribution is based on merit. As noted, primary care stands to contribute more value, and thus merit more distributions, than any other ACO participant.

The dysfunctions of the fee-for-service system have left primary care underpaid. Now, with the compensation model shifting leverage from costs to savings, primary care physicians are stepping up to close this gap.

3. Primary care is realizing that ACOs are for real.

The move to value-based reimbursement is being driven by unsustainable health care costs, not "Obamacare" or the U.S. Supreme Court. The "fiscal cliff" will have more impact on the growth of ACOs than the Affordable Care Act, as it is forcing us to look at the main drivers of the deficit – entitlements such as Social Security, Medicaid, and Medicare. Notwithstanding, many physicians were waiting until after the election to get serious about ACOs.

3a. This column

(Just kidding!)

So, for these reasons, it is not surprising that primary care physicians are now jumping into ACOs. That said, it is still pretty startling to see a 250% increase in 1 year, which was probably a 250% jump from the year before. Thank you for stepping up to help save American health care.

References

1. Accountable Care Organizations: How Will Payer and Provider Adoption of This Model Impact Prescribing Trends in Cardiometabolic Diseases? Decision Resources, October 2012.

2. As covered in prior articles, besides value-based reimbursement, there are seven other essential elements for a successful ACO: primary care, culture, administration, information technology, patient engagement, scale, and best practices.

Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians to form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.

A new report finds that 49% of surveyed primary care physicians expect to participate in an accountable care organization in the next year. Twenty percent already are in ACOs, and most of them are contracting with commercial payers and Medicaid.

Why this dramatic jump? At the end of the day, it is all about the shift from volume-based reimbursement (fee for service) to value-based reimbursement. ACOs are a means to an end, not the end itself. If we will get paid for squeezing waste out of our current system and look at the best way to do it, the elements of an ACO logically fall into place.²

We attribute the big jump in primary care participation to three main factors:

1. Primary care will drive value.

The highest-impact targets for ACOs are:

• Prevention and wellness.

• Chronic disease management.

• Care transitions and navigation.

• Reduced hospitalizations.

• Multispecialty care coordination of complex patients.

While not a monopoly of primary care, all of these opportunities are in your wheelhouse. That is why the Medicare Shared Savings Program ACO regulations correctly require every ACO to include primary care providers. Consequently, primary care providers are being heavily recruited by ACOs.

2. Primary care will derive benefits.

Most ACOs are compensated by receiving some percentage, usually 50%, of savings for a patient population if quality and patient satisfaction metrics are also met. For an ACO to be successful, distribution of savings should be in proportion to their contribution. Primary care physicians should contract only with ACOs that recognize this fundamental connection.

The distribution must be an incentive for every participant to contribute as much value as possible. That will not happen unless the savings distribution is based on merit. As noted, primary care stands to contribute more value, and thus merit more distributions, than any other ACO participant.

The dysfunctions of the fee-for-service system have left primary care underpaid. Now, with the compensation model shifting leverage from costs to savings, primary care physicians are stepping up to close this gap.

3. Primary care is realizing that ACOs are for real.

The move to value-based reimbursement is being driven by unsustainable health care costs, not "Obamacare" or the U.S. Supreme Court. The "fiscal cliff" will have more impact on the growth of ACOs than the Affordable Care Act, as it is forcing us to look at the main drivers of the deficit – entitlements such as Social Security, Medicaid, and Medicare. Notwithstanding, many physicians were waiting until after the election to get serious about ACOs.

3a. This column

(Just kidding!)

So, for these reasons, it is not surprising that primary care physicians are now jumping into ACOs. That said, it is still pretty startling to see a 250% increase in 1 year, which was probably a 250% jump from the year before. Thank you for stepping up to help save American health care.

References

1. Accountable Care Organizations: How Will Payer and Provider Adoption of This Model Impact Prescribing Trends in Cardiometabolic Diseases? Decision Resources, October 2012.

2. As covered in prior articles, besides value-based reimbursement, there are seven other essential elements for a successful ACO: primary care, culture, administration, information technology, patient engagement, scale, and best practices.

Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians to form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.

A new report finds that 49% of surveyed primary care physicians expect to participate in an accountable care organization in the next year. Twenty percent already are in ACOs, and most of them are contracting with commercial payers and Medicaid.

Why this dramatic jump? At the end of the day, it is all about the shift from volume-based reimbursement (fee for service) to value-based reimbursement. ACOs are a means to an end, not the end itself. If we will get paid for squeezing waste out of our current system and look at the best way to do it, the elements of an ACO logically fall into place.²

We attribute the big jump in primary care participation to three main factors:

1. Primary care will drive value.

The highest-impact targets for ACOs are:

• Prevention and wellness.

• Chronic disease management.

• Care transitions and navigation.

• Reduced hospitalizations.

• Multispecialty care coordination of complex patients.

While not a monopoly of primary care, all of these opportunities are in your wheelhouse. That is why the Medicare Shared Savings Program ACO regulations correctly require every ACO to include primary care providers. Consequently, primary care providers are being heavily recruited by ACOs.

2. Primary care will derive benefits.

Most ACOs are compensated by receiving some percentage, usually 50%, of savings for a patient population if quality and patient satisfaction metrics are also met. For an ACO to be successful, distribution of savings should be in proportion to their contribution. Primary care physicians should contract only with ACOs that recognize this fundamental connection.

The distribution must be an incentive for every participant to contribute as much value as possible. That will not happen unless the savings distribution is based on merit. As noted, primary care stands to contribute more value, and thus merit more distributions, than any other ACO participant.

The dysfunctions of the fee-for-service system have left primary care underpaid. Now, with the compensation model shifting leverage from costs to savings, primary care physicians are stepping up to close this gap.

3. Primary care is realizing that ACOs are for real.

The move to value-based reimbursement is being driven by unsustainable health care costs, not "Obamacare" or the U.S. Supreme Court. The "fiscal cliff" will have more impact on the growth of ACOs than the Affordable Care Act, as it is forcing us to look at the main drivers of the deficit – entitlements such as Social Security, Medicaid, and Medicare. Notwithstanding, many physicians were waiting until after the election to get serious about ACOs.

3a. This column

(Just kidding!)

So, for these reasons, it is not surprising that primary care physicians are now jumping into ACOs. That said, it is still pretty startling to see a 250% increase in 1 year, which was probably a 250% jump from the year before. Thank you for stepping up to help save American health care.

References

1. Accountable Care Organizations: How Will Payer and Provider Adoption of This Model Impact Prescribing Trends in Cardiometabolic Diseases? Decision Resources, October 2012.

2. As covered in prior articles, besides value-based reimbursement, there are seven other essential elements for a successful ACO: primary care, culture, administration, information technology, patient engagement, scale, and best practices.

Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians to form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.