Academic journal article Journal of Healthcare Management

Strategic Plan for Maximizing Shared Savings in Accountable Care Organizations

Academic journal article Journal of Healthcare Management

Strategic Plan for Maximizing Shared Savings in Accountable Care Organizations

Article excerpt


In the current fight against rising healthcare costs, the Affordable Care Act (ACA) of 2010 looks to primary care physicians to be leaders in the shiftto alternative reimbursement models. The U.S. healthcare industry is seeking a viable alternative to the traditional fee-for-service reimbursement method, and the concept of accountable care is the solution. It is a model that rewards physicians on the basis of the value of the care they provide, not the volume, motivating primary care physicians to spend more time with patients to avoid high-cost care stemming from preventable conditions and unnecessary hospital admissions.

Whether a healthcare provider is establishing his or her own accountable care organization (ACO) or joining an existing one, the driving benefit of the ACO concept is the same: the potential for shared savings from the Medicare Shared Savings Program (MSSP). The process for establishing or joining an ACO can be tedious, time consuming, and financially costly; however, the benefits can be sizable. Not only do healthcare providers have the opportunity to change the way healthcare is delivered but they also may reap substantial monetary gain from savings generated by improved healthcare delivery.

To do so, however, ACO participants must know how to maximize this potential for monetary rewards generated by their hard work and dedication to provide their patients with quality healthcare. Because the ACO model is new and complex, maneuvering the MSSP successfully- and thereby fully benefiting from it-can be difficult. This essay provides a strategic plan for ACO participants to maximize their shared savings.


Accountable Care Organizations Because the concept of an ACO is relatively new to healthcare and constantiy evolving, finding a conclusive definition for this type of physician network is difficult. Colbert et al. (2014, p. 5) broadly define an ACO as "a group of health care providers who accept shared accountability for the cost and quality of care delivered to a population of patients." Thus, the physicians in an ACO-whether they are primary, specialty, or acute care focused-are responsible for the coordinated delivery of high-quality care and accountable for the cost of that care.

The idea of the ACO was formalized by Elliott Fisher, MD, in a 2007 Health Affairs article describing the development of partnerships between hospitals and physicians to coordinate and deliver efficient care (Fisher, Staiger, Bynum, & Gottlieb, 2007). The concept evolved but was not fully established until 2010, when it was officially introduced by the ACA as one of the programs to be administered by Medicare. ACOs have been increasing in prevalence and size since that time. In its Innovations Spotlight on ACOs, the Centers for Medicare & Medicaid Services (CMS, 2015a) explains:

The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.

In other words, ACOs are eligible for performance-based shared savings, which they can achieve through three CMS programs:

* The Pioneer ACO Model was developed for early adopters of coordinated care. This ACO program no longer accepts applications.

* The MSSP helps Medicare fee-forservice providers become an ACO.

* The Next Generation ACO Model builds upon experience from the Pioneer ACO Model and enables practices to take on more risk and more reward than are possible with other MSSP models.

This essay focuses on the MSSP because this is the program through which most ACOs are able to achieve shared savings.

Medicare Shared Savings Program The MSSP was created by Section 3022 of the ACA as a major reform to the Medicare delivery system and a new approach to healthcare delivery in general (CMS, 2015c). …

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