Accountable Care Organizations: What HIT Professionals Need to Know

On June 28, 2012 the Supreme Court ruled to uphold the Patient Protection and Affordable Care Act (ACA). The ACA re-defined the way healthcare should be delivered from an encounter based care system to a patient management based care system with primary care as the foundation of healthcare. The law establishes Accountable Care Organizations (ACOs) and emphasizes the need for Patient Centered Medical Homes (PCMHs).  As Healthcare Information Technology (HIT) becomes more and more critical for the success of organizations, both providers and IT professionals should understand what the PCMH and ACO models are, how they will change the delivery of care, and how HIT fits into these new models.

Patient Centered Medical Homes (PCMHs)

Since almost 50% of the care delivered does not meet quality standards and 1% of the sickest patients consume 20% of all healthcare costs, it is critical that we better manage patient care! This can be achieved in two ways: by increasing the efficiency of treatment or by reducing the number of the sickest patients. The PCMH has been brought back in the spotlight to address both of these issues.

The concept of a medical home was first introduced in 1967 by the American Academy of Pediatrics and has evolved into a holistic model that places the physician-patient relationship at the center of the healthcare experience. Since the ACA was passed the National Committee for Quality Assurance (NCQA) has established five key areas necessary for assuring cost savings.

  • Comprehensive Care
  • Patient-Centered
  • Coordinated Care
  • Accessible Services
  • Quality and Safety

By focusing on assuring that primary care services are coordinated between a patient’s providers, patients are expected to get treatment for diseases before they become more serious and more costly. HIT will play a critical role in ensuring the proper management of these diseases by providing the tools to coordinate care and the clinical decision support that primary care physicians will need to treat more patients with the ever increasing supply of clinical knowledge. Galen is already providing physicians and physician extenders with tools such as eCalcs and eNotify that address the clinical decision support needs of providers today and we are continuing to develop tools that will meet the needs of tomorrow’s providers.


Accountable Care Organizations (ACOs)

If the patient-physician relationship is at the center of primary care in the new system of healthcare, then the primary care can be considered the center of an ACO. An ACO can be defined as:

An Accountable Care Organization (ACO) is a network of physicians and other health care providers who accept overall responsibility to provide health care services for a defined population and are responsible for improving the quality and reducing the costs of care.”


In order to ensure these goals, the Centers for Medicare and Medicaid Services (CMS) ties the organization’s payment to achieving health care quality goals and outcomes in an effort to achieve cost savings. While there are no specific requirements for how an ACO is structured, the Department of Health and Human Services proposed a set of guidelines for the establishment of ACOs under the three-year Medicare Shared Savings Program (MSSP).  Those choosing to enroll their organization as an ACO agree to accept the responsibility for a minimum of 5000 beneficiaries in return for a capitated payment per patient.  Savings that the ACO achieves through efficiency and increased quality will be eligible to be kept by the ACO; however, if the cost of care exceeds the capitated payment, then the ACO is responsible for the cost. Furthermore, the ACO is then responsible for any out-of-network care for that patient, so it is in the best interest of the organization to provide all the services necessary in a timely fashion. By agreeing to the program the ACO network effectively shifts the financial risk away from the insurance providers to the ACO.  With such a risk and lack of infrastructure, many networks large enough to support an ACO are partnering with insurance provides in new partnerships. It is yet to be seen how many of these relationships will play out after the current trial run is over.

                Like the medical home concept, the concept of shifting risk to the provider is not new. What is new, however, is the recent expansion of communication and information technology into the healthcare arena. HIT is so critical to the success of ACOs that CMS has outlined six key responsibilities of HIT in an ACO:

  • Cross Continuum Medical Management (CCMM)
  • Member Engagement
  • Clinical Information Exchange
  • Quality and Performance Reporting
  • Predictive Modeling and Analytics
  • Administrative and Financial Risk Management Systems

The ACO defined responsibilities of HIT emphasize the importance of quality data in healthcare. At a practice level, CCMM, member engagement, and clinical information exchange will provide the physician and the patient with more tools to monitor and manage a patient’s health. At an organization-wide level, data gained from proper EHR use will not only be able to be used in reporting, but can be used to predict the needs of the beneficiary population 1,3,6 months down the road. Quality and performance reports will allow Quality Improvement departments to more effectively target their efforts. All of the reports and modeling can then be used by administrators to formulate more effective risk management strategies.


In order to stay competitive in an healthcare system that is shifting towards ACOs healthcare organizations must not only ensure the proper use of EHRs, but they must use that information in ways that increase the value of the care being delivered. Furthermore, they must position themselves ahead of their competition by making the right investments in patient communication, health information sharing, and tools to assist in clinical decisions.  These investments will position organizations to not only provide better quality and value for for their patients, but will position them to be competitive for the quality and value incentives of the ACO model.

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