What are five questions you need to ask before joining an existing ACO?

by Michael Jones

As we continue our series discussing Accountable Care Organizations, or ACOs, we now move from the topic of forming your own ACO to what are some key questions to ask before joining an existing ACO. Entering an existing ACO can be a lucrative and well aligned way to accomplish success in value based care for your MSSP patients, but you may find yourself facing buyers’ remorse if you don’t go in well-informed. If you do make a decision that doesn’t align with your practice’s priorities and goals, you will be locked into the model for at least one year, possibly more, depending on the terms of your agreement. 

Recall that there are some dates to be aware of - Phase 1 of the ACO application period going from May 18, 2023 through June 15, 2023 and Phase 2 July 11, 2023 through August 1, 2023. These are the times when entities submit their ACO structure to CMS, and you’ll need to make your own decision over the next four to six weeks. 

Also realize that if you do wait until the final day of the process, you could find yourself left out for an entire year. Submissions to CMS are scrutinized, and if you do not submit before the exact time on the final day, or worse, if you or your ACO submits with any errors, even a misplaced comma or & sign, the submission for your practice can be denied.

With all this in mind, this week, we’ve prepared five questions you should ask before joining an existing ACO. This assumes that your practice leadership team and physicians, clinicians, and staff are all ready to commit to success in the ACO program, and you’re seeking to find the best partner for your success.

Question 1: Is the ACO you are joining a newly formed ACO or an established ACO?

This initial question will set the stage for future questions, and will give you an indication of your next steps. If this is a new ACO, realize that you will not have the benefit of past performance to help make a decision, but you will be establishing that all important new benchmark for the ACO (more on this in future articles). If the ACO is an established one, you can ask follow-up questions about past performance, benchmark, and other operational questions.

We’ve prepared five questions you need to ask before joining an ACO, which should be helpful as you make your decision to join an ACO. 

Question 2: What are the costs associated with joining the ACO?

There is a significant cost associated with the legal, compliance, and operational needs to establish and effectively run an ACO. Further, ongoing costs to analyze data and lead the ACO to current and future success all requires investments of resources and time. There are countless methods to account for these costs, and while most ACOs do not charge a monthly maintenance fee or setup fee, these activities do require resources. Therefore, understanding how the costs of the ACO are allocated, which is often a split of future shared savings, is important. Understand also that potential earnings from shared savings will come usually in the fourth quarter of the year following the performance year, so begin with the knowledge that first, shared savings can never be guaranteed, and second, if and when savings do occur, that payment is often 14-16 months from when you first enter in an ACO contract.

Question 3: How will governance of the ACO be handled?

Governance of an ACO is a well-defined, structured process that requires specialized resources, knowledge, and record keeping. Understanding how this will be done is critical entering into an ACO relationship. In addition, understand what will be expected of your leadership team, physicians, and support team, for ongoing clinical meetings, board meetings, and other meetings and deliverables.

Question 4: How will shared savings be divided, should the ACO achieve savings?

To reiterate, no organization can or should ever guarantee shared savings. However, planning for success is important. When you join either a new or an existing ACO, you are entering into a relationship with other practices, mostly like-minded, but many who you do not know. There will be different levels of performance and participation among these practices, as well as a different number of beneficiaries each practice brings to the ACO. Understanding how the ACO will distribute shared savings with these things in mind, will tell you what the organization values and how this aligns with your practice philosophy. 

Question 5: What ACO track is the ACO on and how does the ACO account for risk should the ACO achieve a loss (at advanced ACO tracks)?

Regardless of whether the ACO is a newly formed entity or an established ACO, the ACO must choose a “track” for the agreement period. These tracks range from Level A, which is the lowest risk/lowest reward track to Levels C, D, and E, which increases along the spectrum of both risk and reward, to the Enhanced track, which offers the highest revenue split with CMS (75% of first dollar savings compared to 40% on Track A), but also includes the highest risk. At these higher level risk tracks, the ACO will be accountable for a loss beyond the selected (or assigned) Minimum Loss Rate. 

Understanding which track the ACO you join will be on is critical, as is being fully aware of what happens should there be a loss and repayment to CMS is triggered.

WIth these five questions in mind, you can approach conversations about joining an existing ACO with more information and can make your decision based on what is best for your practice.

We still have many concepts to review related to ACOs, and, armed with more information, you and your practice can have a better experience as you move into an ACO relationship.