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POLICY UPDATE: Medicare Beneficiaries: How do Accountable Care Organizations (ACOs) Impact your Access to Cancer Care?

Kavita Patel, MD, MSHS, Fellow, Ecomonic Studies, and Managing Director for Clinical Transformation and Delivery, Engelberg Center for Health Care Reform Studies, The Brookings Institution

The ACO Model in Practice

As a promising new patient care model, ACOs are being championed by commercial and federal payers alike. Section 3022 of the ACA included a key provision that authorized the use of ACOs with Medicare beneficiaries in the Medicare Shared Savings Program. Two hundred fifty-nine organizations currently participate in Medicare ACOs – including the Medicare Shared Savings Program, Pioneer Program, and Physician Group Practice Transition Demonstration – and cover an estimated four million Medicare beneficiaries.2 Private payers are similarly engaging in the accountable care model. With more than 100 commercial contracts in place, national and regional payers are piloting ACOs with health care providers.

There are a number of changes that have occurred as a result of the 2010 Patient Protection and Affordable Care Act (ACA), including several that restructure the payment system for Medicare beneficiaries. The traditional fee-for-service payment system rewards the quantity of care delivered and offers significant financial incentives for providing expensive, inefficient care irrespective of outcomes. Moreover, it does not encourage investments in clinical transformation or care coordination. To address the shortcomings of our current payment system and accelerate the transition to a high value health care system, the ACA espoused several new payment models, most notably Accountable Care Organizations (ACOs).1

What is an Accountable Care Organization?

Accountable Care Organizations are intended to realign the payment system by supporting improvements in quality and bending the cost curve. More specifically, the ACO model brings together networks of providers across the care continuum with a shared responsibility to provide coordinated, quality care to a group of patients. Providers are held accountable for per capita costs with reimbursements linked to improvements in quality and total cost reductions.

ACO organizational structures vary to reflect the needs of the local health care market. A number of providers are well positioned to function as an ACO, including individual practice associations, physician-hospital organizations, integrated delivery systems and multispecialty groups. Non-traditional health providers (e.g., public health and wellness programs) are likewise being integrated into the accountable care model. Despite the diversity in structure, three key elements are intrinsic to all accountable care efforts: local accountability, shared savings, and performance measurement.

What is the Role of an Oncologist in an Accountable Care Organization?

Characterized by high variability in cost and treatment choices, cancer care benefits from employing evidence-based guidelines to address variability and improve treatment outcomes at a lower cost. In addition, cancer patients typically see multiple providers in addition to oncologists, including care in a multitude of settings (community-based care, comprehensive cancer centers, etc.). The principal mission for oncologists in an ACO might be to improve care coordination and increase the utilization of evidence-based guidelines, but to date, there has been little participation in ACOs by oncologists. Moreover, final rules for the Medicare Shared Savings Program specify that oncologists can participate in an ACO if they provide significant primary care services to a patient but oncologists cannot manage or organize an ACO themselves. As a result, most oncologists including those located at comprehensive cancer centers are not participating in the Medicare Shared Savings Program.

What does this mean for cancer patients? 

Little attention has focused on the rights and responsibilities of the Medicare ACO beneficiary, in particular a beneficiary's right to receive care outside of the ACO.3 One common misconception is that Medicare beneficiaries attributed to an ACO must seek care from ACO participants only. In fact, Medicare beneficiaries receiving care in an Accountable Care Organization are able to receive services from any provider, including those that are not specifically employed by the ACO. Accordingly, Medicare ACO beneficiaries can still receive treatment at any NCCN Member Institution.

ACOs are responsible for their patients' care costs, regardless of where that care is delivered. Accordingly, ACOs have an interest in minimizing the number of patients seeking care outside the ACO to ensure that patients see providers that are equally incentivized to provide high value, coordinated care. However, ACOs do not change the underlying nature of a patient's insurance coverage. Medicare beneficiaries retain the same benefits and coverage options for in-network and out-of-network providers and are not obliged to obtain care from a specific group of providers. This is particularly relevant for Medicare patients seeking the best cancer care available, regardless of whether providers are affiliated with an ACO. NCCN Member Institutions are committed to providing quality, efficient and effective cancer care, and ACO beneficiaries should consider any NCCN institution as an option for receiving high quality cancer care.

1 Section 3022 of the Affordable Care Act calls for the establishment of the Medicare Shared Savings Program, which "promotes accountability for a patient population and coordinates items and services under Parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery. Under such program - a) groups of providers of services and suppliers meeting criteria specified by the Secretary may work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an accountable care organization (ACO); and b) ACOs that meet quality performance standards established by the Secretary are eligible to receive payments for shared savings under subsection (d)(2)."

2 Program News and Announcements. Centers for Medicare and Medicaid Services. http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/News.html

3 Accountable Care Organizations and You: Frequently Asked Question (FAQ) for People with Medicare. Centers for Medicare and Medicaid Services. October 2011. http://downloads.cms.gov/medicare/pdf/11588.pdf



About Dr. Patel

Kavita Patel, MD, MSHS, is a Fellow and Managing Director of Delivery System Reform and Clinical Transformation at the Engelberg Center for Health Care Reform at the Brookings Institution. A practicing primary care internist at Johns Hopkins Medicine, Dr. Patel is a board-certified physician dedicated to bringing stories from the clinical world to the heart of policymaking. Her expertise spans delivery system reform, access, coverage and quality.

Previously, Dr. Patel was Director of the Health Policy Program at the New America Foundation, a nonpartisan public policy institute in Washington, D.C.

Dr. Patel was previously Director of Policy for the White House Office of Public Engagement and Intergovernmental Affairs and the Deputy Staff Director for the Senate HELP Committee, under the leadership of the late Senator Edward Kennedy.

Prior to Washington, Dr. Patel was a clinical instructor at UCLA and an Associate Scientist at the RAND Corporation. Dr. Patel completed a fellowship in the Robert Wood Johnson Clinical Scholars Program at UCLA and received her medical training at the University of Texas Health Science Center and Oregon Health and Sciences University where she served as Chief Resident in Internal Medicine.