The first recorded mention of the term “Accountable Care Organization” was by Dr. Elliott Fisher during a 2006 public meeting with the Medicare Payment Advisory Committee (MedPAC).
Then, six years later in 2012, The Patient Protection and Affordable Care Act (ACA) authorized the use of Accountable Care Organizations (ACOs) to improve the safety and quality of care and reduce health care costs in Medicare. ACOs are defined as groups of doctors and other healthcare providers who come together voluntarily to give coordinated high-quality care to their Medicare patients. They matter because their member bases are growing fast, and they’re driving both better outcomes and lower costs.
As of January 2022, there are 483 Medicare ACOs serving over 11 million beneficiaries across the country (per the National Associations of ACOs). There are many flavors of ACOs — including hospital-based ACOs, independent ACOs that offer what tends to be called “facility-based primary care” (that is, they build and run their own centers), and “over the top” players such as Aledade, Evolent, and Privia that collaborate with existing independent primary care practices. This network dynamic from Aledade et al enables independent practices to participate in the ACO model when otherwise they probably would or could not.
These days, it’s significant that The Center for Medicare and Medicaid Innovation has clearly expressed that they want every Medicare beneficiary in an accountable care plan by 2030. And their newest program, called ACO Reach, has attracted hundreds of applicants, as CMS seeks to ensure historically underserved patients are fully included.
Primary and Speciality Collaboration
Over especially the last two decades, primary care in America has been limited in what it can or will do in regards to specialty care, such as for categories such as kidney, cardiovascular or GI. But now, given the economic incentives that are baked into the ACO model, along with the rise of advanced diagnostic devices, the specialty line in American primary care is being redrawn much higher – that is, the lower ~40% of acuity in any specialty such as cardiovascular disease will be addressed in the ACO, and only the top ~60% of acuity will be referred out to specialists.
This has led to a “hub & spoke” effect – the idea is that ACOs employ advanced diagnostics and curated clinical data to identify gaps in care. In cardiology, that diagnostic is commonly a cardiovascular echo. What happens next is a partner such as Heartbeat Health conducts a same day read, and if the patient has low-to-moderate cardiovascular disease (CVD), the ACO typically keeps the patient and treats their heart issues face-to-face. If the patient has high-to-acute CVD, the spoke is invoked – the patient is referred to, as an example, virtual cardiology team for ongoing heart care, given the convenience that virtual visits represent for the patient. This “hub & spoke” effect is transforming how primary care tied seamlessly to speciality care work together across disciplines.
The ACO REACH Model
To make matters more nuanced, the new ACO REACH model is now here. REACH stands for Realizing Equity, Access, and Community Health. It replaces the Global and Professional Direct Contracting (GPDC) Model. The GPDC was launched during the Trump administration, with the aim of allowing traditional and non-traditional risk-bearing entities to take on risk for lives across an entire market beyond the normal attribution method for other ACO models.
A major focus of the Biden administration’s ACO REACH program is health equity. A new benchmark adjustment prominent in the REACH rubric is to positively incentivize ACOs covering underserved communities and beneficiaries — or at least avoid inadvertently penalizing them for doing so.
The ACO REACH Model accepted applications in April 2022, and will officially launch next year, likely with known players from the ACO and GPDC realm, and new organizations as well.
All ACOs in the REACH model will have to develop a plan for how they will identify health disparities in their respective communities and then take specific actions to address those disparities. This is a requirement that does not exist currently in Medicare.
Virtual models will also be key in regards to health equity. Medicare patients have proved far more facile with video visits and HIPAA-compliant texting than prognosticators imagined, especially when no smartphone app is required. Since there’s increasingly appreciated “value in the visit,” web and mobile web video encounters appear to be especially effective with seniors, and lead to a level of appointment adherence far greater than what is seen in the face-to-face model.
Patients in ACO REACH – and other ACO models – actually receive more benefits than those in traditional Medicare. Broad use of telehealth is very much allowed, as is the waiving of a requirement for a three-day inpatient hospital stay before an admission to a skilled nursing facility. Patients can receive cost-sharing support to help with copays, as well as rewards for managing their chronic diseases. REACH also allows much more generous use of home visits after patients leave the hospital.
This home visit component is important, because the “Last Mile” is being paved at a rapid rate in America, whereby a nurse with advanced diagnostics can get to the patient’s home in a growing set of major markets in less than 4 hours. Then, the visiting nurse can stream diagnostic data in real time to relevant providers, typically specialists. Prominent “Last Mile” firms include Dispatch Health, Medically Home, MyNexus (owned by Anthem), OneHome (owned by Humana), Livio (owned by Blue Cross of Minnesota) and Emcara (owned by Florida Blue). And there are many dozens more.
The hub for any ACO, traditional or the new ACO REACH model, appears to be face-to-face primary care. The spokes, however, are likely to be increasingly virtual as a function of patient convenience and achieving lower costs of care. And the recasting of the specialty line will mean “V1Cs” (Virtual-First Care companies, as named by the Virtual First Medical Practice Collaboration) are operating in every specialty, representing a rich menu of choices for ACO and ACO REACH players alike.