What to do if you are approached by an ACO

Primary care physicians (PCP) make up the backbone of ACOs. However, given the recent emphasis on the need for more cost-effective and quality care, it will be incumbent upon ACOs — especially those looking to join the Medicare Shared Savings Program (MSSP) — to provide care from specialists, including dermatologists. If asked to join an ACO, whether it’s under the MSSP or with a private-sector ACO, dermatologists should engage in thorough dialogue with the ACO to learn more about what participation would entail.

The following are several critical questions to ask prior to making the decision about whether to join an ACO.

How is the ACO structured?

Find out how many PCPs are members of the ACO and how many specialists have joined and in what specialties. Are there any dermatologists already enrolled and how many referrals would each dermatologist receive? Are there other physicians enrolled who are performing dermatologic services? If there aren’t any dermatologists within this ACO, how many dermatology referrals would they anticipate providing? 

If you would serve as the sole dermatologist within this structure, are you comfortable receiving all of the dermatology referrals? If you are one of many dermatologists within this ACO, are you comfortable sharing referrals?

How does the ACO address specialty physicians’ autonomy?

Specialists in an ACO setting may be concerned that PCPs would resist referring patients to dermatologists if they perceive their own dermatologic care to be more cost-effective than those of dermatologists.

Do not hesitate to voice any concerns you may have about losing control of your patients’ dermatologic care. However, be sure to share studies and documentation that demonstrate how dermatology is uniquely prepared to provide cost-effective and quality care for skin diseases and conditions.

The American Academy of Dermatology Association has several available materials that emphasize the value of dermatologic care:

Beyond quality of care and cost efficiency, what expectations will the ACO have for specialty physicians? 

In regard to practicing within the ACO environment, physician participants in ACOs may reward dermatologists who provide prompt access and are perceived as providing cost-effective, quality-based care.

Find out if the ACO will expect specialty physicians to do inpatient consults. Will specialists be required to work and/or be consistently available after hours and on weekends so their patients do not have to use high-cost emergency rooms for care? How much will involvement with this ACO change how you prefer to practice, and are you comfortable with those changes? 

What financial risks would a specialist assume in joining this ACO?

With regard to the MSSP, CMS has estimated that startup costs for an ACO could amount to $1.7 million per organization. If you were to join the ACO, you could be expected to help cover those costs, and, consequently, may not see any savings in the first stages of the MSSP.

Depending on the structure of the entity, however, the ACO may have certain advantages that can help manage those costs. First, find out how much financial capital the ACO has access to. The more providers in a network, the more access to capital the ACO will have. If the network is affiliated with a large hospital or health insurer, it is possible that you may not assume as much of a financial risk.

Also, ask about whether the ACO already has an electronic health record (EHR) system in place. If so, what type of EHR system does the ACO use, and is it interoperable with other EHR systems that providers and facilities in the community are using? According to a report produced by the U.S. Government Accountability Office, EHR systems can cost $15,000 to $50,000 per physician and require annual maintenance. If an ACO has a system in place, this is one less cost with which the specialists will have to be concerned.

Has the ACO integrated any compensation models to help participating physicians with losses potentially incurred at the initial stages of the MSSP?

During the startup phase of an MSSP ACO, participants of an ACO could experience some loss in revenue due to startup costs and a delay in realized savings through the MSSP. Therefore, there are a few new compensation methods that have been developed to help physicians bridge the initial gap in revenue.

Ask the ACO if they have any of the following systems in place: 
  • Performance scorecard: Uses quality-based benchmarks to evaluate and reward high-performing physicians in the areas of quality and cost-effectiveness.
  • Targeted cost-savings bonuses: Rewards physicians who improve efficiencies and reduce costs in areas that generally incur high costs.
  • Individual and group production bonuses: Bonuses are offered to individuals and groups of individuals who provide high levels of productivity.
  • Practice development compensation: Physicians are rewarded not on production levels, but on innovation of care that allows the ACO to serve more patients.
  • Service line performance compensation: Applicable to hospital ACOs, physicians are rewarded for improving the quality of management/performance of professional services.
  • Efficient use of mid-level staff incentives: Provides compensation for physicians who effectively use mid-level staff to reduce costs without reducing quality of care.

If you chose to join the ACO, will there be a contract?

A contract is not required for a Medicare ACO. Private sector ACOs may require contracts.  Either way, it is helpful for specialists to know whether the ACO intends to officially define compensation and how savings will be shared with the specialist. Also, a contract could potentially spell out expectations for the specialist regarding quality of care, work schedules, etc.

Will the ACO provide clinical guidelines?

Similar to an ACO-specialist contract, find out whether the ACO will provide clinical guidelines for its specialists, or if they will be developed with the specialist’s input. These guidelines could define how many referrals are sent to dermatologists, and how dermatologic care is valued in terms of cost savings and quality of care.

When all the necessary information about the ACO has been collected, schedule a meeting with your general counsel to talk through what you have learned prior to making any decisions about joining.