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4 essential steps to forming an ACO

January 2016 may seem like a long ways off. But if you’re thinking about forming an Accountable Care Organization (ACO) for next year, the clock is already ticking.

The fee-for-service reimbursement model is shifting to value-based-care financial models, such as an ACO. The U.S. Health and Human Services (HHS) set a goal of tying 30% of its payments to these types of arrangements by the end of 2016, and 50% by the end of 2018.

Now is the time to start planning. Here’s a checklist of the essential steps organizations should take in 2015 to be ready to start an ACO in January:

1. April & May 2015 – Decide if the ACO model is the right one for you.

Assess your current situation with questions like these:

  • Are physician incomes going up or down?
  • Are your physicians properly aligned with a value-based-care mindset?
  • Does your schedule have room for more patients with complicated health issues?
  • What percentage of your income comes from Medicare/Medicaid?
  • How well are you engaging your current patient population?
  • How do specialists coordinate with primary care colleagues?
  • Do your private insurance payers have value-based plans in the works?

If your practice wants to coordinate all care for your patients and is willing to engage with the community beyond your four walls, then the ACO model is probably right for you.

2. April & May 2015 – Assess your Medicare population to determine if you have enough attributed lives.

This step is often an ACO rookie’s most common mistake. But you need perspective on what percentage of your practice will qualify.

If you do not meet the minimum of 5,000 patients, then you need to establish a network of specialties and primary care that can help build that number. Ideally, the number of patients is small enough to maintain control, but large enough to protect against cost variability. CMS has a special program to help smaller practices with ACO populations of 5,000 to 10,000, which is perhaps especially helpful in rural areas.

When Allscripts helps clients with this piece, we’ve found that there is a financial benefit to building the attribution base. For every dollar they invest to bring existing patients back to their practice, it generates as much as four dollars in return.

3. May 29, 2015 – File notice of intent with Centers for Medicare and Medicaid Services (CMS).

This may be the easiest step, but it sets the stage for your application process. You don’t want to miss this deadline, because your next opportunity will be a year away and will postpone your ACO start date until January 2017.

4. July 31, 2015 – Submit your application to CMS.

The application is a series of documents. CMS may have follow-up questions that a practice needs to address. The whole application process can take several months from start to finish.

Contact us if you’d like to learn more about how Allscripts can help you with any of these steps.

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About the author

Mike Hofmeister is Vice President, Value-Based & Community Solutions. In this role, he is responsible for Value-Based Care and ACO solutions and sales for Allscripts across the United States. Mike has more than 20 years of experience in the healthcare information technology industry. He joined Allscripts in January 2000 as a Regional Sales Executive in the company's Central Region. Since that time, he has assumed positions of increasing responsibility within sales management, expanding his coverage of products in the US as well as managing the Channel Partner program for the US. Mike began his career at Ernst & Young where he worked in Advisory and Compliance Services primarily in Health Care and Financial Services. Mike holds a BS in Business Administration & a BS in Accounting from the University of Kansas.

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