It’s time to remember ACOs, the latest acronym on many lips in Washington and included in the recently passed health reform legislation.  The idea—reward providers for bringing high level quality and cost-efficient, coordinated care to communities.  ACOs are envisioned as community-based entities accountable for comprehensive healthcare services.  They’re supposed to promote accountability and develop patterns of practice considered to be the best and most effective.  Additional Medicare payments will be given to those groups of providers that work together to manage and coordinate care for Medicare beneficiaries—of course, if they can show that they  met certain quality criteria, achieve specified cost savings, and meet structural requirements for reporting and governance (to be outlined by the Centers for Medicare & Medicaid Services (CMS).

 You’ll find ACOs under section 3022 of the new Patient Protection and Affordable Care Act (that’s the PPACA), which calls for the establishment of the ACO program no later than January 1, 2012. The Secretary of the Department of Health and Human Services  will determine the policies and procedures that will apply to ACOs. 
 Who’s eligible?   An ACO may be formed by a wide range of professionals, including physicians in group practice arrangements, networks of individual physician practices, hospitals, and partnerships or joint ventures between hospitals and physician groups, that are willing to be held to the accountability standards. 

Among the qualifications: Providers must agree to participate in the program for at least three years  and they have to have the HHS Secretary assign it at least 5,000 Medicare beneficiaries and include a sufficient number of primary care physicians for serving those patients.  The Secretary can give preferences to  ACOs that participate in similar arrangements with private third party payers.

The ACO is not a new idea, but rather builds on ideas and models (from Mayo to Kaiser health) that have been discussed for years. Cost savings and quality improvement are key.  How that will be achieved, measured, and evaluated is still open to question, with critics noting this could be managed care in disguise.  And if the patients sense a “warmed over” product focused on cost-savings, the hopes for real success could be dimmed. The division of savings could make some family physicians uncomfortable with ACOs, according to the American Academy of Family Physicians. As the degree of risk borne by ACOs increases, the need for regulation of the financial security of these organizations will also increase, which could influence patient care decision making. Financing and regulatory policies will still continue to create pressures in ways that may take the focus off the patient.

But that gets to the cost issues again.  If the focus is on how to best coordinate the care of Medicare beneficiaries—and they may mean more connections rather than less connections to a host of other providers and community and social service agencies than envisioned in this plan. Whether this will be a successful evolution—or revolution—remains to be seen.