Fact or Fiction: How to Evaluate an ACO Proposal

July 12, 2023

With the clock ticking on CMS’s 2030 accountable care goal, many ACOs are offering upfront cash or the opportunity to participate in a new value-based care model. But there’s a lot more to an ACO than what’s touted in their proposal. Before signing on the dotted line, here are three key areas to investigate.

1.  History & Performance 
ACO proposals often include projections on shared savings revenue, and the first question you should ask when receiving such a proposal is, “What’s your track record?” Then verify the ACO’s MSSP shared savings and losses through the CMS “public use file” (PUF) data or on the ACO’s website.

The finances are important, and here’s why: In 2021, there were 475 MSSP ACOs, and the MSSP program average was 3.19%. Only 274 earned shared savings, and the average savings rate for those 274 ACOs was 5.14% – that’s $302 before splitting with their members.* So, if you’re being quoted a double-digit savings rate, it’s worth asking to dig more deeply into the math.

Be sure to ask about their performance in payer-based contracts as well, and don’t overlook the ACO’s members as a source of performance information. Seek out testimonials, customer survey results, or better yet, to speak with a current member to understand the ACO experience firsthand. 

2. Risk & Financials
Remember that an ACO is called accountable for a reason: there can be financial consequences for members if the ACO underperforms. 

The ACO should be clearly invested in strategies to support members and reduce shared losses (e.g., clinical intervention support, patient outreach). You’ll also want to look at how shared losses are paid. Be on the lookout for contractual language requiring participants to bear a large percentage of shared losses or hold the ACO harmless from them.

Keep in mind that ACOs sometimes deduct management fees or upfront payments offered at signing from shared savings before distributing to members. Make sure you understand these deductions and any ongoing expenses that might impact future shared savings. 

3. Data Access & Reporting
Let’s look at data you should expect to receive from an ACO. At the very least, you should receive information about the patients treated by the ACO. The format and frequency of this reporting is critical. Having actionable patient insights will fuel your ability to improve care and control costs – and ultimately help you achieve shared savings.

If accepting an ACO proposal will require you to adopt a new software, make sure that software will integrate seamlessly with your EHR and that you aren’t going to encounter any hidden or surprise costs associated with that integration. 

Just as importantly, you need to explore whether the ACO will report on your behalf for federal or commercial payer requirements. For example, some MSSP ACOs take on the reporting obligations for clinicians under programs like MIPS and CAHPS. Others facilitate claims-based reporting so you don’t need to document requirements in multiple payer portals. This administrative support can be a big help to you and your staff, and it’s a benefit you should factor into your consideration of ACO proposals.

Lastly, make sure the ACO has access to all the necessary information to predict shared savings or losses. Sophisticated modeling capabilities allow savvy ACO partners to manage and optimize their portfolio and continuously track key metrics so members are set up for success.

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* Source: CMS Public Use File. Shared savings not guaranteed.