1. Accountable Care
Organisation
Surg Cdr Hemendra Dange

2. Scheme of Presentation
 Introduction
 Aim
 Principles
 ACO & PPACA
 Payment models
 ACO & Quality measures
 Stakeholders
 Challenges

3. Historical Background
 Mr. Elliot Fisher- Director of the Center for
Health Policy Research –first used this
term in 2006 at a public meeting of the
Medicare Payment Advisory Commission
 The term reached its pinnacle in 2009
 Akin to Health Maintenance Organisation

4. Introduction
 According to the Centres for Medicare & Medicaid
Services(CMS), an ACO is "an organization of health
care providers that agrees to be accountable for the
quality, cost, and overall care of Medicare
beneficiaries who are enrolled in the traditional fee-
for-service program

5. Aim
 The aim of ACO is to:-
 Make providers financially responsible in hope of
improving care management
 Limit unnecessary expenditures
 Provide patients freedom to select medical services

6. Principles
 Three core principles:-
 Provider-led organizations with a strong primary care
base, collectively accountable for quality and total per
capita costs across the full continuum of care
 Payments linked to quality improvements & cost
reduction
 Reliable and progressively more sophisticated
performance measurement, to support improvement
and provide confidence that savings are achieved
through improvements in care

7. ACO & PPACA (1/3)
 The Dept of Health and Human Services proposed
guidelines for establishment of ACOs under the
Medicare Shared Savings Program (MSSP)
 These guidelines stipulate steps for voluntary groups
of physicians, hospitals and other health care
providers to partake in ACOs

8. ACO & PPACA (2/3)
 According to the PPACA, the MSSP "promotes
accountability for a patient population, coordinates
services and encourages investment in infrastructure
 Redesigns care processes for high quality and
efficient service delivery
 The ACO must define processes to promote
evidence-based medicine and patient engagement,
monitor and evaluate quality and cost measures, and
coordinate care across the care continuum

9. ACO & PPACA (3/3)
 Prior to applying to MSSP, an ACO must establish
 Appropriate legal and governance structures
 Co-operative clinical and administrative systems, and
 A defined shared savings distribution method

10. ACO Payment Models
 The CMS, in order to lower the health care cost has
proposed:-
 One- sided payment model, &
 Two-sided payment model
 ACOs are free to choose any of these

11. One Sided Payment Model
 ACOs would participate in shared savings for first
two years
 Assume shared losses in addition to the shared
savings for the third year
 Financial risk is less in this model
 The maximum sharing rate is 50%

12. Two-Sided Payment Model
 ACOs would participate in both shared savings and
losses for all three years
 Financial risk is more in this model
 The maximum sharing rate is 60%
 Both models have a shared loss cap with annual
increments (5%,7.5%,10%)

13. ACO Quality Measures
 To improve healthcare quality, CMS has established
five domains to evaluate ACO’s performance
 patient/caregiver experience,
 care coordination,
 patient safety,
 preventive health, and
 at-risk population/frail elderly clientele

14. ACO Stakeholders
 Providers- hospitals, physicians & healthcare
professionals;
 May also include healthcare dept, social security
dept, safety net clinics & home care services
 High level co-ordination is essential among providers
 Payers- Federal govt. as primary payer,
Private insurance or employer purchased insurance
 Patients- Primarily Medicare beneficiaries
Homeless & uninsured people

15. Roles Played by Stakeholders
 Providers- Developing ACO- infrastructure
Assume leadership role in running ACO
 Payers- Collaborate with each other to align incentives
as well as financial incentives for the providers
to improve quality of care
 Patients- Play a role in decision making to improve
received healthcare

16. Challenges
 Lack of specificity regarding ACO implementation
 High startup cost
 Large annual expenses to maintain the system
 Risk of violation of antitrust laws by ACOs- if
perceived to drive up costs through reducing
healthcare competition while providing lower quality
care
 To circumvent this the US Dept of justice has offered
a voluntary antitrust process for ACOs

17. Thank You