As ACO Numbers Rise, an Update for Physicians

August 9, 2013
Aubrey Westgate

The growth of accountable care organizations is accelerating and will likely continue into 2014. Here's what it means for physicians.

Since the implementation of the Affordable Care Act in 2010, the phrase accountable care organization (ACO) has rapidly transformed from a new - and somewhat confusing - concept, to a wide-scale reality.

In December 2011, CMS announced the 32 organizations that would participate in its Pioneer ACO Initiative. A few months later, it announced the first 27 organizations that would participate in its Medicare Shared Savings Program (MSSP). Since then, ACOs, in which physicians, medical practices, hospitals, and other health systems partner to improve care quality while reducing costs, have cropped up across the country.

Today, more than 200 ACOs participate in the Medicare Shared Savings Program, and private payers are getting in on the action as well. In early August, Andrew Croshaw, a partner and managing director of the Center for Accountable Care Intelligence, which researches and analyzes the evolution and future of integrated care at Leavitt Partners, a Salt Lake City-based consulting firm, estimated there are about 254 ACOs in which providers are partnering with private payers. That's up from the 200 private payer ACOs he estimated to be in existence in early 2013.

Experts predict that moving into 2014 (when many of health reform's biggest initiatives will be implemented, such as state health insurance exchanges and the individual mandate) even more ACOs will crop up across the country.

"We're still in the early stages of ACO development," Kip Piper, a healthcare consultant in Washington, D.C., recently told Physicians Practice.  "I think what we're going to be seeing is ... more private sector initiatives, where private plans are going to be both recognizing more ACOs, and using that more often as a key part of their model of their delivery system, if you will."

Croshaw agrees. "In our conversations with major national payers, they seem to be very active in developing a queue of ACOs that will be announced in the future," he told Physicians Practice. "I think we have good reason to believe that from the commercial payer side they are seeking more and more of these types of relationships."

But ACO growth will occur in other areas as well. Piper predicts an increase in the number of Medicaid ACOs in certain states, either directly through Medicaid or, more often, through Medicaid health plans. In addition, he predicts that more ACO members will begin participating in multiple ACO models, such as both the MSSP and a private payer-created ACO.

Still, a few factors could "slow the rollout" of ACOs, said Piper. A big one: The "steep learning curve" ACO participation entails. "In order to succeed at the provider level, an infrastructure must be developed and really new relationships, new capabilities need to be worked out," he said.