ACOs: A Call to Arms for Radiology

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 - Evolution
Accountable care organizations (ACOs) have befuddled imagers, with radiologists wondering how the specialty might fit into a model seemingly focused on primary care. ACOs have been a hot topic for several years, and generate many unanswered questions. How will the model differ from health maintenance organizations? What methods will they use to cut spending? The answers remain elusive, but with more than 200 ACOs in various stages of operation in the U.S., it’s time for radiologists to take charge of defining imaging’s role in the ACO model.

Primary care has driven most ACO development, which is why many radiology thought leaders suggest the specialty should be aggressive in having its voice heard by ACO leadership. “[Radiologists] need to get out of our departments and start working in operations management. We must establish a strong interdisciplinary clinical presence and start taking positions of greater responsibility in our hospitals and larger organizations as we, by necessity, evolve to become the experts in quality and safety, rather than recipients of blame,” wrote Alexander Norbash, MD, of Boston University School of Medicine, in a Masters of Radiology roundtable discussion published October 2011, in the American Journal of Roentgenology.

Similarly, in a white paper produced by healthcare technology company MedCurrent, Steven Gerst, MD, argued that radiologists should request a seat at the ACO table during contracting and utilization management meetings “rather than have rules and RBMs [radiology benefits managers] imposed upon the ACO’s participating physicians.”

But before they can take an active role in directing an ACO, radiologists need to understand the basics of the ACO model and its growth.

An emerging picture

Mark Smith, MD, MBA, president and CEO of the California Healthcare Foundation, famously said an ACO is like a unicorn: it’s reputed to have mythical powers, but no one has actually seen one. While the jury is still out on the power of ACOs to curb costs, a clearer picture of what the model looks like has emerged.

ACOs deliver population-based healthcare, with financial incentives geared toward high-value management of health, rather than pay-per-service or volume-based methods of payment. The Patient Protection and Affordable Care Act (PPACA) included provisions which established a shared savings program for providers serving Medicare beneficiaries. Private payers also can establish ACO collaborations to manage populations enrolled in commercial health plans. ACOs don’t necessarily eliminate fee-for-service, but they provide bonuses to providers who keep costs down. Hospitals and doctors have to meet certain benchmarks, with a heavy emphasis on prevention, and are compensated for keeping patients healthy rather than each service administered.

The primary difference between ACOs and previous cost control models is that providers have more freedom to manage how best to deliver value, and can choose how to divvy up the shared savings reward payments. In the past, cutting costs was about control—preauthorization or conditional payments—while the ACO model is focused on setting targets, providing analytics and offering incentives, then letting healthcare systems determine how to meet their goals, explains Mike Fay, vice president of health networks for Wellmark Blue Cross Blue Shield in Des Moines, Iowa, which has helped create three commercial payer ACOs in the state.

“[Previous models] tried to micromanage the healthcare system. This is sort of macromanaging the system,” says Fay.

Judging from the growth of ACOs, it’s safe to say the unicorns have been set free. According to healthcare consulting firm Leavitt Partners, a total of 221 ACOs had been identified in 45 states as of May. Growth has been strongest in large metropolitan areas on the East and West Coasts, with some activity in the Midwest. There are fewer ACOs in the South and Mountain West regions, according to Leavitt Partners.

ACOs also are starting to target Medicaid populations. In Oregon, 14 entities have applied to become a coordinated care organization for the state’s Medicaid program. They will follow ACO-type budgeting with payment for patient care, not fees for services and offer shared savings incentives for healthcare professionals. Medicaid ACOs have popped up in Colorado, New Jersey, Oklahoma and Utah, according to the American Medical Association.

ACOs in practice

It’s too early to see robust data on the effect of ACOs on healthcare spending, but different groups have developed varied strategies for reaching cost-cutting goals. The Premier healthcare alliance, based in Charlotte, N.C., manages the PACT (Partnership for Care Transformation) collaborative. This program helps organizations prepare for population health management, either in the form of a Medicare ACO or an employee population health plan. Among the services offered through the program, Premier performs an onsite assessment of a provider’s capabilities and what it needs to be an effective population health management organization. Within radiology, the capabilities framework examines activities ranging from an organization’s image communication capacity to radiology utilization management.

A point of emphasis for the collaborative is having organizations learn from one another, says David K. Dafilou, MS, a principal with Premier who leads the PACT Readiness collaborative. “It’s not as if Premier has a cookbook on how to do this. I don’t think anybody does,” he says, which is why it’s important to get providers talking to each other and exchanging ideas.

Fay says communication also has been integral in ACOs implemented by Wellmark. The standard contract encourages operating committees featuring members from both providers and the insurer to be held at least twice a month to make sure all issues are being addressed and all opportunities are evaluated.

“One of the ways a relationship takes a bad turn is a lack of communication or a lack of people thinking they are getting a response to their communication,” says Fay. He notes that most of the representation on the provider side is primary care and hospital based, with the role of radiology and other specialists still to be developed.

As more ACOs get up and running, they start to see where their costs are and Fay says they will have a better idea of which specialties they need to actively engage to help manage those costs and improve quality.

ACOs & radiology: Opportunity or obstacle?

Some imaging stakeholders wonder—and worry—about what the ACO model means for radiology, which often takes a big chunk of the blame for rising healthcare expenses because of the high cost of advanced imaging. With a primary care-focused model, if radiologists don’t have a voice in ACO leadership, as advised by Norbash and Gerst, will the specialty be left out in the cold?

The only way to demonstrate savings is for radiologists to be in control of which studies are performed, argues Ramsey K. Kilani, MD, a neuroradiologist at Duke University Medical Center in Durham, N.C., and member of the American College of Radiology Future Trends Committee. “There’s value in the decision not to perform an MRI. Currently, there is no mechanism for reimbursement of that.”

The alternative to having radiology internalized in an ACO and applying appropriateness metrics is leaving radiology groups as a third party and contracting out imaging services, says Kilani. This is not an appealing position for radiologists, he adds, because the ACO will have a huge financial incentive not to order imaging.

“There’s really no way to look at ACO legislation as anything other than rationing,” says Kilani. Rather than making the politically tough choices themselves, legislators have passed the decision along to existing healthcare networks by encouraging ACOs, he says.

Dafilou admits that a lot of what he sees in ACOs is leadership dominated by primary care, but that doesn’t necessarily mean a raw deal for radiology. The model could even limit the use of third-party authorizations and RBMs. “We believe if the financial incentives are aligned so that both the primary care provider (PCP) or referring physician and the radiologist have a mutual interest in seeing that it’s the right test at the right time, a third party is not needed. The radiologist has the expertise to help guide the PCP or referring physician to the most appropriate test.”

What’s critical for radiology, says Dafilou, is promoting the fact that imaging can result in reduced costs downstream if the appropriate test is ordered. The challenge for radiologists is not to be perceived as cost centers, he says, but rather as sources of guidance essential for delivering the correct diagnosis and determining the appropriate course of treatment.

It’s still early, Fay acknowledges, but once ACOs figure out how best to include specialties in shared savings, and specialists begin to market themselves based on the value they provide, the model will demonstrate its strengths.

“It’s new for all of us and we have a lot to learn. We get smarter every week and every time we get together. It’s going to be interesting to see how different organizations focus on different opportunities and hopefully, they can all be successful and show there’s not one way to do this.”