Tuesday Sep 25, 2012

Strength in Numbers for Small, Solo Practices That Work Together

When primary care physicians in my area of rural Nebraska started talking about the possibility of starting an accountable care organization (ACO) last year, there was considerable trepidation.

That fear was based, at least in part, on a lack of understanding about the concept. Physicians wondered, and rightfully so, how it would affect them. Another critical question was, "Are we going to be passive and see what happens with ACOs, or are we going to be proactive and protect our own interests?"

In the end, we did our homework, found out more about the model, how it works and -- perhaps most importantly -- how we want it to work for us. Ultimately, we moved forward with plans to start our own ACO.

We have a grant application pending with CMS' Center for Medicare and Medicaid Innovation. If successful, we would receive $250,000 up front for infrastructure. Participating practices would receive a $36 per-member, per-month fee in the first month, and an $8 per-member, per-month fee, thereafter.

Though that funding would be incredibly helpful to get this project started, we likely will move forward with plans for an ACO even if the grant application is denied. That's because we already have a highly organized group of primary care physicians working together, via our independent practice association (IPA), the Southeast Rural Physicians Association, which was founded in the 1990s as a response to managed care. Since then, the group has grown to more than 75 physicians in more than a dozen Nebraska counties.

Our IPA has given us leverage with payers because together we care for more than 100,000 patients. But it also has provided other benefits. We have quarterly educational meetings on clinical topics. We also have been able to bring in state legislators for meetings to discuss health care policy. 

So why do we need an ACO?

The Affordable Care Act proposed a model of care whereby a group of physicians, hospitals and other suppliers of services could work together to provide coordinated care to Medicare beneficiaries as an ACO. This organization can be a group of physicians or it can be physicians and hospitals working together.

I have encountered a lot of concern when talking to my colleagues about ACOs. Their legitimate worry is that if a hospital or other non-primary care organization forms an ACO, solo and small practice family physicians could be left in a take-it-or-leave-it type of negotiation because they represent a relatively small number of patients.

But one option for small groups, including rural physicians, is to do what we did and form an IPA, which would represent a much larger number of patients and provide a stronger negotiating position. Another option is to form your own ACO and work with hospitals to provide subspecialty care.

For us here in Nebraska, forming our own ACO guarantees that primary care will be the foundation of our organization.

So how does it work?

An ACO is paid based on a benchmark amount determined by the expected cost per beneficiary of both Medicare part A and B. In the event that an ACO creates efficiencies that cost less than this benchmark amount, there is a shared savings plan that allows 50 percent of the savings to be returned to Medicare; the other 50 percent is returned to the ACO. It is critical that participating physicians know and understand how these savings will be distributed to providers of care in the ACO.

In our case, some of the savings undoubtedly will come from reduced emergency room trips and reduced hospitalizations. Our hospitals, including small, rural facilities, are extremely important to our practices and our patients, and we hope to work with them.

Complicating the process is the fact that some of us are employed physicians. Initially, our ACO will be limited to a group of about 48 physicians from privately owned practices in nine counties. This restriction will allow the fledgling organization to be more nimble and make adjustments quickly. Our plan is to include employed physicians once the ACO is up, running and established.

So what can you do if you are interested in forming an IPA or ACO? The first step is to reach out to other practices in your area and find like-minded physicians who want to be proactive. AAFP News Now recently published a special report about payment models, including ACOs. For those looking to learn more, this is a good place to start.

Robert Wergin , M.D.is a member of the AAFP Board of Directors. 

Comments:

ACO's are nothing more than corralling senior patients into an HMO setting within and IPA. Not rocket science, but actually a great idea for hopefully cost containment. I think ACO's are a temporary entity to phase/track patients into HMO's. IPA's can develop into formidable forces in bargaining power. The wrench on the model is that large urban areas have hospital owned/ managed IPA's which by history do not do well. Unfortunately, the different hospitals beat up on each other and their doctors. Consolidating, forming allies etc. would probably benefit all.

Posted by David Scot Zimmerman M.D. on September 26, 2012 at 09:37 PM CDT #

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