ACO options for dermatologists

Participation in an ACO by health care providers and patients is voluntary. Specialists can join more than one ACO, but should evaluate local circumstances carefully prior to making that decision.

Joining an ACO

ACOs have primary care physicians at the core, but the ways in which specialists can be engaged vary. Dermatologists can participate in an ACO by:

  • Becoming a member of a large multispecialty or specialty group that contracts with an existing ACO.
  • Gaining employment in a hospital that joins or forms an ACO.
  • Joining a network of individual practices with primary care physicians to form an ACO.

Contracting with an ACO

Dermatologists do not have to join the ACO. Rather, they can contract with an independent physician association (IPA) or a primary care group with links to an ACO. Existing referral networks are a key factor in determining whether to participate in an ACO.

Forming a Medicare ACO

Integrated delivery systems (IDSs), independent physician associations (IPAs), multispecialty practices, and hospitals are all eligible to form an ACO. Any provider who is enrolled in and bills Medicare directly for services may join a Medicare ACO. Medicare-enrolled providers can join with non-Medicare enrolled physicians if 75 percent of the ACO’s governing body is made up of ACO participants. Providers who do not bill Medicare directly for primary care services may not form an ACO, unless they are joined by a provider who bills Medicare directly for primary care services.

Payment options for ACOs

CMS offers three ACO programs: the Medicare Shared Savings Program (MSSP), Advance Payment Model, and the Pioneer ACO Model. Note: The MSSP ACO is the only ACO option that was set forth under the 2010 Patient Protection and Affordable Care Act (ACA). 

Shared Savings Program

A Medicare Shared Savings Program (MSSP) facilitates coordination of care among a network of providers to improve the quality of care for Medicare fee-for-service beneficiaries, while realizing cost savings. If accepted into the MSSP, an ACO would be required to serve at least 5,000 Medicare patients and agree to participate in the program for three years. Medicare would continue to pay providers for services as it does under original Medicare payment systems. 

ACOs can share in savings under the MSSP. CMS develops a benchmark for each ACO based off of estimates of what total expenditures for Medicare fee-for-service Parts A and B would have been without the ACO structure. This benchmark is updated/re-evaluated every year within the three-year performance period.

CMS offers a one-sided risk model and a two-sided risk model. In a one-sided risk model, the ACO shares in the savings for three years, and shares in the losses for the third year. This is ideal for less-experienced ACOs. In a two-sided risk model, the ACO shares a greater portion of savings for each of the three years, but also shares the losses for all three years. This model is ideal for more experienced ACOs. 

ACOs that do not meet quality measures and do not achieve cost-savings targets will be held accountable for losses. 

Advanced Payment Model

An Advanced Payment Model is an initiative developed by the CMS Center for Medicare & Medicaid Innovation for ACOs already participating in the MSSP. It is targeted primarily at physician-owned and rural ACOs that might not have the capital to effectively participate in the MSSP. Note: The Advanced Payment Model ACO was not set forth under the 2010 ACA, but rather, serves as a testing initiative for future models of ACO payment systems.

The Advance Payment Model offers ACOs advance payments that will be repaid by the ACO from future shared savings that are compared to a benchmark based off of estimates of what total expenditures for Medicare fee-for-service Parts A and B would have been without the ACO structure. The goal with the Advanced Payment Model is to increase participation in the MSSP by providing incentives up front.

Pioneer ACO Model

The Pioneer ACO Model is an initiative developed to test various payment arrangements for experienced and well-established ACOs. The Pioneer ACO Model offers higher levels of risk and reward, as compared to the MSSP. Note: The Pioneer ACO Model was not set forth under the 2010 ACA, but rather serves as a testing initiative for future models of ACO payment systems.

In the first two years of the Pioneer ACO agreement, shared savings are determined by comparing the expenditures for the first two years with previous CMS expenditures for the patients that are affiliated with the Pioneer ACO. If the Pioneer ACO has provided savings, it will be eligible to change to a population-based payment model in its third year. Population-based payments allow for per-beneficiary per month payments, which would replace the ACO’s fee-for-service payments.