• warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.
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  • strict warning: Declaration of views_content_plugin_display_panel_pane::options_submit() should be compatible with views_plugin_display::options_submit($form, &$form_state) in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/views_content/plugins/views/views_content_plugin_display_panel_pane.inc on line 402.
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  • strict warning: Declaration of views_handler_filter::query() should be compatible with views_handler::query($group_by = false) in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/handlers/views_handler_filter.inc on line 587.
  • strict warning: Non-static method views_many_to_one_helper::option_definition() should not be called statically, assuming $this from incompatible context in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/handlers/views_handler_filter_many_to_one.inc on line 23.
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  • strict warning: Declaration of views_plugin_query::options_submit() should be compatible with views_plugin::options_submit($form, &$form_state) in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/plugins/views_plugin_query.inc on line 169.
  • strict warning: Declaration of views_plugin_argument_validate::options_submit() should be compatible with views_plugin::options_submit($form, &$form_state) in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/plugins/views_plugin_argument_validate.inc on line 87.
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  • strict warning: Non-static method view::load() should not be called statically in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/views.module on line 1113.
  • strict warning: Non-static method views_many_to_one_helper::option_definition() should not be called statically, assuming $this from incompatible context in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/handlers/views_handler_argument_many_to_one.inc on line 35.
  • strict warning: Non-static method views_many_to_one_helper::option_definition() should not be called statically, assuming $this from incompatible context in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/handlers/views_handler_argument_many_to_one.inc on line 35.
  • strict warning: Non-static method views_many_to_one_helper::option_definition() should not be called statically, assuming $this from incompatible context in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/handlers/views_handler_filter_many_to_one.inc on line 23.
  • strict warning: Non-static method views_many_to_one_helper::option_definition() should not be called statically, assuming $this from incompatible context in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/views/handlers/views_handler_filter_many_to_one.inc on line 23.
  • warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.
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  • warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.
  • warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.
  • warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.
  • warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.
  • warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.
  • warning: preg_match(): Compilation failed: disallowed Unicode code point (>= 0xd800 && <= 0xdfff) at offset 1811 in /home/coloni6/public_html/obamacarewatcher/sites/all/modules/ctools/includes/cleanstring.inc on line 157.

Just What is an ACO?: A Brief Introduction to Accountable Care Organizations

"The accountable care organization is like a unicorn, a fantastic creature that is vested with mythical powers. But no one has actually seen one."

A mere six pages of Obamacare legislation delegated broad jurisdiction to the Secretary of Health and Human Services (HHS) to establish an Accountable Care Organization (ACO) program. The term “Accountable Care Organization” was coined in 2006. And there has been a couple of federal pilot program testing the idea. Yet without a regulation defining and establishing ACOs, most could only speculate on what one is.

But, on April 7, 2011, HHS took their six-page directive from Congress and turned it into a 127-page proposed regulation. We now have a better idea of what an ACO is and is not.

Here is our brief summary.

The accountable care organization is like a unicorn, a fantastic creature that is vested with mythical powers. But no one has actually seen one." [1]

A mere six pages of Obamacare legislation delegated broad jurisdiction to the Secretary of Health and Human Services (HHS) to establish an Accountable Care Organization (ACO) program. The term “Accountable Care Organization” was coined in 2006. And there has been a couple of federal pilot program testing the idea. Yet without a regulation defining and establishing ACOs, most could only speculate on what one is.

But, on April 7, 2011, HHS took their six-page directive from Congress and turned it into a 127-page proposed regulation. We now have a better idea of what an ACO is and is not.

Here is our brief summary.

An ACO is . . .

  1. . . . . a network of health care providers . . .

  2. Often compared to a Healthcare Maintenance Organization (HMO), an ACO, like an HMO, is a network of health care providers (be they doctors, nurses, hospitals, etc.) that work together to provide care to for certain individuals. However, unlike within an HMO, the patients of an ACO are permitted to see health providers outside of the ACO network.

  1. . . . who serve Medicare patients . . .

  2. But the ACO is set up specifically for Medicare patients so as to take advantage of Medicare’s Shared Savings Program (see below), a new way for the federal government to pay doctors for treating Medicare patients . An ACO will contract with Medicare for three years to serve at least 5,000 Medicare patients per year. ACOs may also treat non-Medicare patients but must seek payment elsewhere.

  1. . . . by coordinating the care . . .

ACOs, by coordinating the care they provide to their patients, hope to improve the quality of that care while reducing costs.

  1. . . . in order to “share” any savings.

Under Medicare's “Shared Savings Program,” doctors in an ACO will still be paid a flat fee for each service they provide. But if they are able to save money by coordinating their efforts with other providers in the network while still meeting 65 quality measures, they will receive an extra bonus payment from Medicare.

The opposite is also true. An ACO risks losing money if their care results in higher costs.

The idea is to move away from the “fee for services” system where doctors are paid a flat fee for each service they render, to a more results-oriented model.

The bureaucracy gives and the bureaucracy takes away

The merits of the theory behind ACOs aside, many critics fear that the same regulations that make ACOs possible will lead to their demise.

As the quote above hints at, ACOs are seen by some as a panacea for all that ails our health care system. But since HHS has issued its regulation, more and more experts are becoming critics—including some who are (in theory) ACO proponents.
Former Senior Advisor to the Centers for Medicare and Medicaid Services (CMS), Ronald Klar recently wrote:

[T]he proposed rule creates a program that is likely to have few participants.  This is because it is overloaded with provisions to mitigate the likelihood that any conceivable negative possibility will occur, rather than trusting the design and encouraging and supporting participation.[2]

Steven Lieberman, visiting scholar at the Brookings Institution, agrees:

Unless fundamentally changed, the proposed regulation on ACOs and the Medicare Shared Savings Program will stifle (if not halt) creation of accountable care organizations (ACOs).  The proposed regulation imposes unfavorable economics, unrealistic requirements, high uncertainty, and significant risks for ACOs.[3]

Those who look to bureaucracies for solutions will be disappointed.

1 Ian Morrison, Chasing Unicorns: The Future of ACOs, H&HN WEEKLY, Jan. 3, 2011, http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG/Article/data/01JAN2011/010411HHN_Weekly_Morrison&domain=HHNMAG (quoting Mark Smith, M.D., M.B.A., president and CEO of the California Healthcare Foundation).

2 Ron Klar, Overweight And Out of Shape: ACO Regs Need a Major Makeover, HEALTH AFFAIRS BLOG, Apr. 7, 2011, http://healthaffairs.org/blog/2011/04/07/overweight-and-out-of-shape-aco-regs-need-a-major-makeover/.

3 Steven Lieberman, Proposed CMS Regulation Kills ACOs Softly, HEALTH AFFAIRS BLOG, Apr. 7, 2011, http://healthaffairs.org/blog/2011/04/06/proposed-cms-regulation-kills-acos-softly/.