Why do we Need an Accountable Care Organization?
In practical analysis, the population of the United States demographics is vastly changing. Between the years of 1946 and 1967, the post war baby boom created 76 million American babies. Nearly 11 million of those Americans have died prior to 2012. This leaves 65.2 million aging baby boomers.
When you add to this the number of immigrants in this age group that entered the US after the 1965 Immigration Act, (11 million immigrants), the total of 50-69 year old Americans is brought back up to 76.4 million in 2015 because immigration rate exceeded the amount of baby boomer’s death rate.
Statistics show that by 2029, the baby boom aged population will still be at 61.3 million. Law-makers, seeing these statistical projections saw a desperate need to improve Medicare by lowering operating expenses and improve patient care.
They needed a way to strategize a model of how the professional medical industry, with all its power, would be effectively motivated to improve health care, showing measurable accountability and results in their patients’ health, and do this without manipulative increases in fee for services that would exceed the Medicare budget expectations.
Patient, prior to the implementation of ACO standards, had the option to find appropriate medical care wherever they preferred. They will continue to have this right of flexibility of medical care but this model of the ACO is being motivated to improve their patient services to the point where their care reaches a patient approval rating that keeps patients willing to voluntarily remain within the ACP group of medical care services of primary physicians, specialists, hospitals and other health professionals.
How will ACO’s Reduce Costs and still make Profits?
ACO’s are responsible for Medicare insured patients. When forming their ACO cooperative groups that include the entire array of medical needs for aging Americans, their complete care programs will avoid the “middle man” scenario that has been duplicating efforts, tests and diagnostic procedures, and other medical services that create a waste in added expenses unnecessarily.
If the ACO’s each take a minimum of 5,000 Medicare patients per year, and the standard of health is improved while meeting or beating CMS cost reduction goals, plus meet the accountability standards of quality of care by the Medicare and Medicaid Services, (CMS), each AC) group will be awarded a bonus of 50 percent of their savings below Medicare projected budget for that year. The other 50 percent will be returned into the Medicare fund.
Should some of the ACO models not succeed in specific benchmarks of patient care quality, improved care and cost savings audits, they will still get their expected Medicare insurance reimbursement payments, but there will be no bonuses. In some cases, there will also be penalty payments.
One key to this enrichment of service is focusing on prevention and careful management of chronic care diseases. Thus far in the first year of the Medicare ACO program, participating provider groups saved a total of $380 million, while effectively keeping their patients healthy and out of the hospital.
CMA reports that of the 114 shared savings ACO groups, nearly half had lower spending than what Medicare projected for that year. Only 29 percent of that group had saved enough to earn the savings bonus of 50 percent.
From this, ACO physicians groups are learning that the success of this effort requires that every medical service professional they invite to their group must be motivated to achieve the goals. Because patients maintain their right to seek medical attention outside of their medical care group if they are not happy with their care or services, ACO’s will see increase in patient care cost from outside medical sources.
ACO groups will never have the control over their patients to keep them within their billing system for treatment like the HMO’s did up to the 1990’s. Nor will patients ever be penalized for exercising their right to preferred medical treatment. This means that the only alternative is for ACO’s to provide optimum care and services to keep their patients healthy, confident of their care, and seeing positive results from their treatment plans.
What Happens to Fee for Service Billing?
Since this program takes the power out of the hands of hospitals and medical care professionals and essentially puts it back into the hands of patients seeking appropriate care, is this the end of Fee for Service billing?
No, hospitals and physician will still be paid more for the more services they offer. The focus is taken off the motivation of performing more procedures to generate more fees. The new focus is on bonuses and penalty fees. As the ACO’s become more proficient at influencing decision makers, (their group clinicians), to offer only beneficial services and make only reasonable referrals to specialists, etc., they will find a balance in not cutting too many services, and generating enough bonuses for a good profit margin.
How Does the ACO incentive Impact Ophthalmology Practices?
The Ophthalmology practice has not been central to ACO groups until recently because Medicare has always allowed patients to maintain their current Ophthalmology care, even when they receive primary care from an ACO. In fact, physicians may now be inclined to offer financial incentives that encourage patients to try a new eye doctor who is compliant with ACO’s standards.
Ophthalmologists need to insert themselves into the discussions with their local area ACO groups. Many primary care practices are reportedly training their doctors to refer new medicare patients to specialists with a positive record for cost control, have low instances of complications, get good outcomes and provide quality care.
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