The company spent nine months developing a system to build ACO networks and is currently in talks with about half a dozen interested hospitals. Buck’s system includes what it calls “outcomes-based contracting,” a way for payors to identify the physicians and other services they want for their networks.
Here Michael Jacobs, a principal and national clinical practice leader at Buck, describes 11 steps ACOs can take to set up provider networks.
1. Create a leadership structure. The ACO will need to select a full-time manager and set up an oversight authority, such as a committee made up of the medical directors from member organizations. Leadership needs to meet legal criteria, such as compliance with Stark, self-referral and antitrust laws.
2. Include ancillary providers. In addition to physicians and hospitals, an ACO should include rehabilitation centers, physical therapy, home health, infusion, ambulatory surgery centers and imaging centers, to name a few.
3. A key criterion will be IT. An electronic medical record system and other IT features will be key for member organizations. “They will need to share medical records as well as a great deal of metrics to track quality and costs,” Mr. Jacobs says. Also, members’ IT systems need to be interoperable.
4. Standardize care processes. Identify steps in the care process to make it as efficient as possible without sacrificing quality or safety. “Patients should go through stages of care as efficiently as possible,” Mr. Jacobs says. For example, how long should patients have to wait for an appointment? When should the ICU patient go to a step-down unit and when should the hospital patient be released to a tertiary care facility? “A key goal is to eliminate waste, such as a follow-up office visit,” he says.
5. Establish clinical standards. Adopt evidence-based guidelines for care. “One initial focus could be patients with chronic conditions,” Mr. Jacobs says. Guidelines might include when to send a patient to the ED or when to select hip or knee surgery.
6. Choose physicians wisely. Select the right balance of specialists for your patient mix and do not accept physicians who won’t follow evidence-based criteria. Making these determinations involves collecting a great deal of performance data from the physician. Examine actual cases to determine if the physician is the right fit. “Practices that are dropped tend to be ones that have fewer resources,” Mr. Jacobs says.
7. Standardize claims processing. The ACO will need to have consistent billing practices across all providers. For example, coders should be including modifiers and other add-ons to CPT and ICD-9 codes. This will improve payments and make the data more useful for monitoring quality and costs.
8. Monitor costs. The ACO might hire an outside auditor to determine if costs are in line with expectations. For example, the auditor might find spending for a certain service, such as imaging, is out of control. The organization would then need to come up with a plan to control utilization in that area. On the other hand, utilization might be too low, which could happen if patients’ co-payments are set too high.
9. Monitor physician performance. The ACO should compile a profile on each physician, identifying strengths and weaknesses in quality and efficiency. For example, how often do they prescribe brand-name as opposed to generic drugs? When do they choose minimally invasive rather than open-cavity surgery? And how often are their patients admitted to the hospital or show up at the ED? The ACO might designate a physician in the same specialty to talk to low-scoring physicians.
10. Work with payors. Payors may offer the ACO assistance in improving certain metrics. For example, they might offer a pay-for-performance arrangement. The payor might say, “Our costs for your services are out of line in this area,” Mr. Jacobs says. “We will pay you extra to reverse that trend.”
11. Consider marketing services. Since patients are allowed to choose services wherever they like, even outside the network, ACOs will have to lure them to their facilities. This may require advertising, such as billboards, or focused marketing campaigns, such as coupons for discounted services like colonoscopies.
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