Massachusetts Medical Society: Clinical and Financial Integration of Physician Practices: Panel Discussion

Clinical and Financial Integration of Physician Practices: Panel Discussion

After the presentations from Dr. Dunlap, Dr. Collins and Mr. Waxman, the speakers addressed a series of questions from the audience. The following summarizes the dialogue.

1) As a small practice, what should I consider before joining an Accountable Care Organization or Integrated Delivery System (ACO/IDS)?

Deciding whether or not to join an accountable care organization (ACO) or integrated delivery system (IDS) is a strategic decision that must be carefully considered relative to your unique circumstances.  While participation in an ACO/IDS may facilitate the transition from a traditional fee-for-service to a value-based reimbursement environment, physicians must carefully assess their current situation and environment, and consider the possible benefits and challenges of joining an ACO/IDS.

Step 1: Assess Where You Are in Your Career, What Organization You Belong to, and Your Panel of Patients

Assessing what stage your career is in, is an important first step. Organizationally, you will want to know if you have the support of a contracting entity to assist you with the ACO/IDS process. Additionally, you may want to be familiar with the dynamics of the health care environment in your area. Consider the following questions when exploring your interest in joining an ACO/IDS.

  • Do You Currently Belong to an IPA/PHO or Other Organization?  If you belong to an IPA/PHO or other organization, what can it do to help you meet the future challenges of operating in a value-based reimbursement environment?  Does the PA/PHO have resources to assist your transition to an ACO/IDS? Is there a strong physician voice in your IPA/PHO  or other organization and are they having discussions with potential ACO/IDS partners?
  • Where Are Your Primary Referral Sources?Will your decision to join an ACO/IDS impact your referral stream? Have your competitors joined an ACO/IDS?
  • What Are the Local Hospital and Health Plan Dynamics Within Your Community?There are a significant number of new partnerships and alternative payment models underway that may impact your practice, therefore it important to consider your environment. Are there other, similar practices in your area that have aligned services? Do other providers in your region seem equipped to help you succeed in value-based care environments? Are hospitals and other proviers in your area aligned and are competing for your patients? Are payers you contract with supportive of the transitions and alignments in your area?
  • Are You comfortable Transitioning to an ACO/IDS at This Stage of your career?

Some physicians considering retirement may choose to remain independent, while others may want to position themselves for the future healthcare landscape as they leave their clinical practice.

Step 2: Determine if Your Practice Is Ready by Conducting a Practice Assessment

Approaching the decision from an informed position, in which you have done the research and understand your particular practice’s current capabilities and potential challenges, will help in shaping important conversations and eliciting the information necessary to determine whether joining a particular ACO makes sense for your practice. A critical component of this process will be to assess your practice’s readiness for value-based reimbursement in order to identify crucial gaps and prioritize strategic activities. The subsections below further detail the factors to consider and approach for assessing your practice’s readiness level. Consider your level of readiness in the following domains:

  • Information Systems and Infrastructure: Is your practice using an EMR? What level of EMR integration is currently in place? Do you have the infrastructure (staff, resources, etc.) in place to be able to support the transformation from a small practice to an ACO/IDS?
  • Practice Operations: How do you currently manage chronic care populations? Does your practice use care managers or other non-physician extenders to support the monitoring of patient adherence to clinical treatment recommendations? How does your practice handle patient handoffs and communication with referring physicians, specialists, hospitals, etc.?
  • Data Analytics:  What data analytics tools does your practice have that can help you measure and meet quality and cost targets?

Step 3: Learn About the ACO/IDS by Asking the Right Questions

Understanding the organization, its culture and structure is important prior to joining an ACO/IDS.  Expectations should be clearly defined ahead of time so that you understand your role within the organization.

Before engaging in discussions with various ACO/IDS’s and attempting to determine which one may be the best fit you may want to consider asking the following questions:

  1. What are the costs involved and/or support provided when participating in the ACO/IDS?
  2. What are the requirements related to exclusivity to the given ACO/IDS, and what are the expectations/requirements for any existing relationships with other providers not participating in the ACO/IDS?
  3. If you decide to leave the ACO/IDS at any point in the future, what is the process for doing so?
  4. What are the quality of care and cost standards and metrics required for participation?
  5. How does the ACO/IDS communicate information concerning, and provide support related to, clinical, quality, and cost-based metrics?
  6. What are the electronic data capture and reporting requirements?
  7. What is the ACO/IDS policy regarding medical records?  Who owns your performance data and reports?
  8. What are the specific terms of the ACO/IDS contract? We advise that you seek legal consultation to fully understand legal implications
  9. What does the governance structure look like?  Is there physician representation and leadership?
  1. Review the ACO/IDS mission, vision, values, goals, and expectations.  Are they aligned with what you are looking for in an ACO/IDS?
  2. What is the ACO/IDS track record with population risk assessment and management?

If you are interested in approaching an ACO/IDS, contact its medical director, its director of operations, or another high-level administrator in the organization to find the appropriate individual who can help answer your questions. 

2) In an ACO/IDS, patient compliance plays a role, specific to meeting targets on quality metrics. How could joining an ACO impact patient compliance?

In an ACO/IDS and in new payment models, improvements in patient health are often associated with financial incentives, creating an additional value to maximizing patient compliance with treatment plans. ACOs/IDS’s may provide an opportunity for physicians to more easily engage patients in their healthcare through disease management, resources, communication, education, etc.   Patients who are knowledgeable about and engaged in their care are often more likely to adhere to provider advice, which hopefully will improve overall outcomes, enhance patient satisfaction, and reduce complications.

You should consider what patient engagement tools are available in your current practice and find out what the ACO/IDS would be able to offer. Here is a checklist to help you make this comparison:

Patient Engagement Resource Available in my current practice Available in ACO
Tools to reach patients, such as a patient portal
Community resources for educating my patient population
Wellness and behavioral programs focused on providing patients with education on self-care and health maintenance strategies
End-of-life care management and planning
Educational videos, Web- and/or paper-based information guides, and counseling sessions that help patients understand treatment options, outcomes, risks, and benefits

Will joining an ACO bind me to exclusive participation in that one ACO?

Contract dependent with private payers and organizations.

Under federal regulations regarding Medicare ACOs, all members of an ACO with a TIN that bills for primary care services must be exclusive to a single Medicare ACO. “Primary care services” are defined broadly. This means that:

  • Primary care physicians may only participate in one ACO
  • Specialists who bill for services that could fall under Medicare’s scope of primary care services, such as office evaluation and management services, may only participate in one ACO
  • Specialists who share a TIN with another provider who performs primary care services may only participate in one ACO
    • In this situation, the specialist may contract with an ACO on an individual basis and bill using his/her individual Social Security number (SSN) in order to work for more than one ACO. However, billing under multiple TINs and SSNs may cause administrative burdens or require written consent by payors to avoid breaching existing contractual obligations
    • Specialists may also furnish services under a separate entity that bills under a different TIN rather than the TIN associated with a group practice that provides primary care services

Aside from the regulatory exclusivity requirements, prospective ACO participants should review ACO agreements for additional exclusivity provisions and are well advised to negotiate to avoid any type of exclusivity arrangement.  Additionally, participants can negotiate whether participation in an ACO will be for Medicare/Medicaid plans only or in additional payor arrangements as well.

Source: Mark Waxman, Esq. Foley & Lardner LLP

How can I best position myself to meet the required quality and cost measures of an ACO/IDS?

In an ACO/IDS model, it is important to be able to identify and monitor high-risk individuals, apply evidence-based practice guidelines when appropriate, and use clinical data to help meet quality and performance benchmarks.Below are tips that may help you achieve success in these areas:

Access/Understand Your Data:  Physicians participating in an ACO/IDS will need access to key data in order to make sound decisions about patient care.  In order to meet the specific requirements of your ACO/IDS, you will need to be able to interpret data, including quality and cost benchmarks, to help identify opportunities for improvement.  Data analytics, data warehouses, as well as other tools are important features of an ACO/IDS, especially in risk-based contracting scenarios. 

Know the ACO’s Expectations Regarding Metrics, Targets, and Reporting Guidelines: In an ACO/IDS environment, physicians are required to meet quality and cost metrics and maintain targeted levels of performance in order to be reimbursed. Physicians participating in an ACO/IDS should find out the expectations regarding metrics, targets, productivity, and reporting guidelines so that they can make informed and timely decisions in areas including: Utilization, care coordination/patient safety, and treatment options.  Physicians should be certain that they have the ability to develop individualized care plans, based on the patient’s unique needs, preferences, values, and priorities.  As physicians are the medical professionals best qualified by training, education, and experience to provide diagnosis and treatment of patients, it is important to ensure clinical decisions will be made by the physician, with input from the team providing the care of the patient.

How do I know if I can take on risk and what measures can be put in place to guard against the possibility of loss under a risk-based contract?

It is important to recognize that ACO/IDS payment models may involve the possibility of financial loss if the participating organization does not perform well under the defined economic arrangements.  The risk of such loss can and should be mitigated by the ACO/IDS, but participating provider organizations should understand:

  • What mitigation measures have been taken by the ACO/IDS to guard against the possibility of loss under the risk-based contract
  • What mechanisms the ACO/IDS has in place to measure performance so that the risk of loss/population risk can be identified early to allow for corrective measures to be taken
  • Whether the ACO/IDS secured reinsurance to mitigate the costs if performance targets are not met; and
  • Under what scenario(s) would participating practices face financial liability for poor performance on behalf of their group or the network as a whole?

As you plan for the future in a risk-based environment, you will need to assess your current capabilities and ability to transition your practice to be able to take on risk.

How Can I Get Started?

The following considerations can help you in getting started:

  • Start with the High Risk Patients. Interventions that are targeted to specific patient populations and clinical areas typically have a greater impact on quality improvement and cost.  The most immediate areas for opportunity are often target chronic diseases and highest-cost conditions.  Targeting higher-risk patients may result in a greater likelihood of reduced costs and utilization.  For example, chronic diseases are generally responsible for  a large portion of overall healthcare spending.  Ultimately, the evaluation and adoption of evidence-based clinical protocols and practice guidelines targeted for these patient cohorts may result in fewer preventable complications and emergency department (ED) visits, shorter average hospital length of stay (LOS), and less gaps in care.
  • Develop a Protocol for Effective Care Coordination.Interventions aimed at improving follow-up care and communication across providers in a continuum of care settings is key.  Examples include the sharing of patient records, follow-up calls, and medication review and reconciliation.
  • Know Your Data. As mentioned before, it is important for physicians to collect and interpret their patient data to be able to improve patient care, incorporate patient feedback into care delivery, and demonstrate that cost savings and care improvement are occurring simultaneously.  Because ACOs and IDSs are inherently data-driven, the management and analysis of data are core organizational requirements.  Additionally, a quality measurement strategy is needed to ensure that maintaining cost thresholds are contingent upon achieving care quality goals.
  • Understand the Terms of Your Contract.Finally, in order to minimize risk, it is important to examine and evaluate the contract and make certain that the agreement contain the appropriately protective and legally compliant terms.

6) What are the governance models that work best for physicians?


The following are important components of a successful governance /organizational structure:

  • Physician participation (at least some who are still practicing) on the boards of each entity/ACO arrangement.
  • Physician participation in leadership roles to keep patients central to the organization; physician directed organizations have the largest number of advantages when it comes to patient centric solutions.
  • Governance model for ACOs will probably not be the same as the governance model of the hospital or health system that preceded the ACO, as a significant number of physicians should be on the management team.
  • Physician alignment with strategic initiatives, through working committees that they participate on, delegated by the board to accomplish specific tasks.
  • Physician managed ACO’s, with an aligned relationship between hospitals and physicians, helps accomplish strategic priorities; adequate physician group size and capital are requirements for physician owned ACO’s. These physician driven organizations have successfully partnered with hospital systems to improve quality and lower costs.
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