7 Aspects of ACOs From Steven Lieberman, Former Assistant Director of the White House OMB

Steven M. Lieberman, managing member of Lieberman Consulting in Bethesda, Md., is a visiting Scholar at the Brookings Institution and former assistant director of the White House Office of Management and Budget. Here he details seven points on federal planning for accountable care organizations.

1. A large pool of patients is necessary. "ACOs are based on a belief that systems are better than non-systems," Mr. Lieberman says. Healthcare systems with many providers and patients give the ACO population-based data to make decisions about the best possible care, he says. Medicare ACOs need a minimum of 5,000 patients, but an ACO made up of commercial patients would need at least three times that many, due to younger patients' lower utilization of services.

2. EMRs are preferable but not required. Electronic medical records provide better data and allow for higher quality of care, but "they should not be a barrier for starting an ACO," Mr. Lieberman says. ACOs without EMRs can use claims data to build other tools, such as patient registries for treating patients with chronic conditions.

3. Different provider structures allowed. An ACO could be a single group of physicians, a hospital-run organization and everything in-between, Mr. Lieberman says.

4. Takes the patient's perspective. In a fee-for-service system, a physician's interest in the patient ends after the service is provided. In an ACO, by contrast, the physician is concerned about the whole continuum of care — the way the patient sees it.

5. Patients 'attributed' to a physician. In an HMO, a member consciously designates a physician as his or her gatekeeper. In an ACO, patients are assigned a physician based who they have seen before, which is derived through claims data. This allows freedom of choice.

6. Underlying payments can vary. "ACOs do not require any change in the underlying form for payment," Mr. Lieberman says. They can be paid a fee-for-service rate, a PPO rate or even an HMO rate, then they are paid extra for any savings they make in a "shared savings" approach.

7. Several models of payment. The shared savings approach can be carried out in three basic ways. A "bonus-only" model, the most basic approach, pays a bonus to ACOs that save money above a certain target but does not penalize ACOs that do not. A second "symmetric" model provides a greater bonus to ACOs that perform better than the target but reduces their fees of they do not. And finally, a "partial capitation" model pays out part of the base payment in a capitated rate, starting at 10 percent of the total payment and going as high as 50-60 percent to ACOs that are proficient in handling insurance risk.

Contact Steven Lieberman at Lieberman.consulting@gmail.com

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