What is an ACO?

An ACO, or Accountable Care Organization, is a group of physicians contracting with Medicare to provide a set of agreed upon services for a certain fee. Any savings are split between Medicare and the ACO. The ACO will also share in the losses with Medicare up to a 10% of the costs.

Describe the proposed role of ACO's in the medical care payment system.

An ACO will be setup with a group of like minded physicians of similar practices. It is based on the current model of large group physician practices that have been eligible for Medicare bonus checks for achieving quality measures. The physicians bear the initial cost of the setup and it has been proposed to average around $750. There are 2 pathways to ACO participation. ACO's can accept to be at full risk in year 1 or choose to be at risk from year 2 onwards. It is expected that ACO will benefit physician reimbursement in 7 years although actuarial figures only exist for 3 years. An ACO will have to report 60 core measures and bonus payments will be made on quality measures.

What is your opinion of the functionality of the ACO as a medical payment system.

ACO can only be run by large financial organizations like hospital systems as they are the ones with the scale and financial strength to withstand losses. ACO's will be run by bureaucrats at the hospital level and will add another layer of middle me competing for the diminishing medicare dollar.

There has been a reluctance amongst physicians to join ACO's as they do not percieve them to be cost effective nor a method to improve quality.

- Edhayan