The ACOs structure was recently enabled by by the Patient Protection and Affordable Care Act of 2010 Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). This Act states that, not later than January 1, 2012, the Secretary shall establish a shared savings program that promotes accountability for a patient population and coordinates services under Medicare Parts A and B, and encourages investments in infrastructure and redesigned care processes for high quality and efficient service delivery. The primary purpose of developing ACOs is to extend the life of Medicare for the next generation by slowing down healthcare cost increases. In addition, it is expected that ACOs will generate lower cost commercial health insurance products. This will likely cause significant pressure from employer groups and individuals purchasing policies to keep plans affordable, therefore, applying downward pressure on fee-for-service commercial reimbursement rates. This, in turn, applies pressure on clinical providers, such as physicians and hospitals, to reduce their costs of providing services.
If you decide to try out ACO participation, negotiate rates commensurate with your current reimbursement rates from the payer organization offering the ACO structure. This is essentially a re-routing of patients from the same payer to a new health insurance product. Each dollar of revenue accrued in the ACO is a dollar of prior revenue that used to be accrued via the PPO offered from the same payer. Revenue is always a simple function of the rate paid by the payer for a service or case, multiplied by the volume performed. Initially the current approach of fee for services performed may not change, even in a new ACO. However, as ACO pilots progress and more risk is shared across the PPO and IPA by your practice, be cognizant of changing payment methodologies, bundling, reductions for repeated tests and/or procedures and the effect of performance metrics on your reimbursement. You may want to specify exclusions for services or procedures where this type of payment mechanism puts your practice at greater risk of losing revenue.
For more information on this and other tips to increase payer reimbursement please contact Susan Charkin at 800-497-4970, or firstname.lastname@example.org.