The Medicare ACO Strategy

CMS defines ACOs as “groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.” The goal of coordinated care is, “to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary

The ACA included reductions in Medicare payments to plans and providers and introduced delivery system reforms that aims to improve efficiency and quality of patient care and reduce costs including accountable care organizations (ACOs), medical homes, bundled payments, and value-based purchasing initiatives”(Cubanski & Neuman, 2016, p. 2).

According to Shi and Singh an accountable care organization, also known as an ACO, describes an integrated group of providers who are willing and able to take responsibility for improving the overall health status, care efficiency, and satisfaction with care for a defined population. The ACO was established by the Patient Protection and Affordable Care Act (PPACA) Section 3022 mainly to better the quality of care to beneficiaries and to save money for Medicare (Golden). The accountable care organization is voluntary for provider participation and Medicare beneficiaries still can choose treatment from any provider they wish which is beneficial. The ACO has been viewed as a potential tool for rebuilding the traditional Medicare coverage according to Medicare Payment Advisory Commission known as MedPAC (Rosenbaum). According to CMS,

When Medicare was first established, Medicare adopted the payment methods of Blue Cross Blue Shield which meant that the program was paid hospitals on the basis of their own costs and physicians were being reimbursed by the fees that they charged which caused hospitals and physicians to provide care without boundaries (Anderson et al., 2015). This method caused Medicare to dissipate the budget that was established for beneficiaries to utilize. Now, with the ACA being implemented, Medicare had done an overhaul of payment reimbursement. Medicare is now moving toward a volume to value payment initiative that links payment to patient outcomes, experience of care, while giving providers an incentive to limit spending

The Medicare Shared Savings Program was established by section 3022 of the Affordable Care Act and aims to improve beneficiary outcomes and increase the value of care by providing better care for individuals, better health for populations, and lowering growth in expenditures (Lieberman, & Bertko, 2011). The Affordable Care Act created ACOs, which is part of Medicare since January 2012, together with a Shared Savings Program it has the potential to lower costs, improve the quality of care, facilitate delivery system reform, and promote innovation in health care ( Lieberman, & Bertko, 2011).

The ACA provides various benefits to Medicaid enrollees by expanding coverage to include mental health, prescription drugs, family planning services, hospice care for children, tobacco cessation, preventive and obesity related services. The main provision of the act is to reduce cost while improve the quality of care and the way it is delivered. The law prohibits insurance companies from dropping coverage for any reason, provide insurance even if there is a pre-existing condition. Provide coverage for preventive services and immunizations. Dependant coverage is extended up to age 26. The law established a cap on insurance company’s spending on non-medical costs and administrative expenditures. Insurance companies cannot charge more money based on an individual’s health status, gender or salary. The ACA reforms Medicare by closing the coverage gap also known as the “donut hole” by continuing coverage for prescription drugs.

The Medicare Modernization Act, or Medicare Prescription Drug Improvement and Modernization Act of 2003, was passed into law to amend and modernize the current Medicare system. There are a few problems that this law aims to solve or provide relief towards. First, it will allow seniors to save money on their prescription drugs because many have the problem of not being able to afford them on their own or have a lack of drug coverage with their existing plan. Low income seniors and those with limited resources will receive further assistance paying for medication. The second problem addressed by the MMA is that all seniors are receiving a standard Medicare and are not given choices of alternatives to better fit their needs. They will

The Affordable Care Act created a new approach to care which is called the Accountable Care Organization. ACO is a system of doctors and hospitals that share a financial and medical responsibilities. If the ACO is successful in meeting quality and cost savings targets, these organizations qualify for financial incentives or shared saving from Medicare programs. The goal of the ACO is to coordinate

Since the late 1980s, Medicare has reimbursed physician services using the Medicare Physician Fee Schedule (MPFS), which encompasses 10,000 procedure codes. Each code is assigned resource-based relative value units (RVUs), which are designed to reflect physician work, practice expense, and malpractice expense. To adjust for local differences in cost of living, each RVU is modified using geographic practice cost indexes (GPCIs) and then converted to dollars using a “conversion factor.” This system rewards physicians who produce a high volume of services; not surprisingly, Medicare Part B expenditures have grown rapidly.

On viewing this video “The Story of Medicare” I was able to understand that the role of Medicare(MR) and Medicaid (MD) centers is to cover all people over the age of 65 or older regardless of their income, health status or residence. Medicare also provides benefits for people of any age that have certain disabilities. MR & MD services is a program that allows low-income families whether healthy or sick to receive health care coverage. Medicare has successfully increased the life expectancy of Americans over decades as before Medicare coverage, the life expectancy of white Americans was 61 years and black Americans 48. This number has increased for both white and black Americans adding 15+ years of life expectancy. I believe that Lindon B. Johnson

​Kaiser Health News recently published an article on a new trend in healthcare. This trend introduces the Accountable Care Organization (ACO). The Centers for Medicare and Medicaid services defines it as “groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients” (“Accountable Care Organization,” 2015). According to the Affordable Care Act (ACA), the goal of the ACO is to be able to share health cost-savings with providers who are able to save money by eliminating unnecessary procedures and reduce health costs while increasing quality of care. ACOs make health professionals become more accountable in maintaining good-quality, coordinated healthcare for a patient through a value-based system that is evaluated through a number of criteria and benchmarks (Ronai, 2011).

Fifty years ago, Lyndon B. Johnson signed the Medicare program into law. “It has been a reliable guarantor of the health and welfare of older and disabled Americans by paying their medical bills, ensuring their access to needed health care services, and protecting them from potentially crushing health expenses.” (Hamel, Blumenthal, Davis, & Guterman, 2015, p. 479). With the encouragement of George W. Bush, congress passed the Medicare Modernization Act of 2003 (MMA). The MMA extended Medicare to include prescription-drug coverage, known as Medicare Part D. In 2013, Medicare covered the health care expenses for 52.3 million Americans, costing $583 billon. Originally, Medicare had difficulty controlling costs; physicians and hospitals were

Accountable care organizations are growing. Accountable Care or Coordinated Care is putting consumers at the front at our evolving healthcare industry. Accountable Care Organizations (ACO) strive to improve outcomes and reduce costs with improved patient care coordination (Robinson, J. C., Schaffer, L. D. 2015). Coordinated Care is defined as the Right care, at the right time, with no duplication, and to prevent errors. The Affordable Care Act encourages health care organizations to improve quality of care and reduce spending. In 2013, there were 320 ACO’s and as of 2014 there are now 700. 2/3 of the population now live in an area that services ACO’s. One out of three hospitals have ACO plans (Perficient Inc. 2015).

Medicare is currently facing challenges when it comes to making healthcare affordable for all. Even though this program was design to protect the elderly from financial hardship due to medical care, the cost of health care still affects those with low incomes and serious illnesses. Also, the rise of health care cost has not only affected the health care system, but also Medicare. It is said that insures base their pricing off of number of healthy individuals. What Clinton is trying to do is increase the number of healthy people in the Medicare population by increasing the number of people younger than 65. Since the amount of people between the ages of 55 and 64 are larger, Clintons hypothesis is that the amount of healthy individuals should

There are three core principles to any ACOs. First, provider-led organizations with primary maintenance and a strong base are liable communally and total per capita costs for quality with full continuum for the population of care for patients. Second, excellent improvements will have linked to also have complete costs reduced, and third, progressively and reliable sophisticated measurement performance to improve, support, and provide the savings of confidence are achieved with improvements of care, , McClellan M, McKethan AN, Lewis JL, Roski J, Fisher ES (2010).