ACOs: Time for ED managers to get involved, shape how their departments will add value

For many months, the buzz among health care administrators and policy-makers has been all about accountable care organizations (ACOs), an emerging payment and delivery model that many hope will put an end to the fragmented nature of America's health care system while also bringing down costs. While it is not yet precisely clear how ACOs will operate, on March 31, 2011, the Department of Health and Human Services began to roll out its vision for the model in a proposed rule for the establishment of the Medicare Shared Savings Program for ACOs, one of the first health care delivery reforms to be carried out under the Accountable Care Act, the sweeping health reform legislation that was passed by Congress in 2010. (See an outline of how ACOs would work under the proposed rule, below.)

While the 429-page rule goes a long way toward spelling out the rules and policies that will govern ACOs, at least with respect to Medicare patients, less immediately apparent is how EDs will be impacted by a model that clearly aims to reward health care systems that are successful at steering patients toward less acute care settings. However, there is broad agreement that ED managers who get involved with the process now have a chance to shape how their own departments will fit into broader changes that are coming down the pike.

Find ways to provide value

In reviewing the proposed rule, Dennis Beck, MD, FACEP, president and CEO of Beacon Medical Services, an Aurora, CO-based emergency medicine consulting firm, and a past chairman of both the quality and reimbursement committees of the American College of Emergency Physicians (ACEP) based in Irving, TX, is concerned about a handful of quality indicators that pertain to ambulatory care-sensitive conditions, such as diabetes, congestive heart failure, and asthma, that have been developed by the Agency for Healthcare Research and Quality (AHRQ) in Rockville, MD.

"There are about eight [areas] where you are tracking ED visits as part of your quality indicators, so the assumption there is that you will have a greater likelihood of meeting your quality indicators and getting your shared benefit dollars if you reduce ED visits," says Beck. "And the challenge for EDs and emergency care will be how to differentiate appropriate visits from inappropriate visits."

If medical homes or primary care physicians (PCPs) fear that they will not meet their quality indicators if a patient goes beyond a specific number of ED visits, then they will likely do everything they can to keep a patient out of the ED, even if that patient needs to be there, stresses Beck. "There are going to be some challenges around patients who don't have access because of policies or procedures with that ACO."

At press time, ACEP was pouring over the proposed rule in preparation of a formal response to CMS, but Beck expects that quality indicators will remain part of the Medicare Shared Savings Program, and that the basic make-up of this program will be adopted by other payers. "You can't make a cost-effective ACO just to do Medicare," he says. "I think it is pretty much a given that ACOs will also be contracting with private payers."

In light of such trends, Beck advises ED managers to consider what they can most effectively contribute to the ACO model. "Emergency medicine has been either intentionally or unintentionally on the margins of some of these strategies like episodes of care and ACO development because there is this notion that if you can just keep all these people out of the ED, where care is expensive and inefficient, we will have a better health system," he says. "So I think what needs to be considered from an individual departmental perspective or physician group perspective is what things you need to do, either as a department or group, to provide value to an ACO."

For example, if an ACO is committed to reducing fragmentation of care and reducing waste and inappropriate utilization, then groups need to look at how they can work with their hospital-based physicians and PCPs and show how they can improve coordination of care, advises Beck. "Good coordination of care on the front end and the back end is something we ought to be very vigorously working on now so that we can provide that value to the ACO."

Beef up case management

Elijah Berg, MD, president of the emergency physicians group at Melrose-Wakefield Hospital in Melrose, MA, observes that coordinating care with PCPs is going to become an increasingly important part of the emergency physician's job under the new model, but he stresses that the physicians cannot handle this burden entirely by themselves.

"We have always needed case managers and the ability to get services at home, and to the extent that hospitals now are serious about providing those resources, we will need to utilize them," says Berg. "ED managers should really be starting the conversation of getting additional continuing care or coordinated care staff within the hospital because emergency physicians cannot do it on their own. They're going to need case managers to help them."

Even with the proposed rule, it is difficult to predict how the ACO model will ultimately be shaped, but Berg believes emergency providers should never resist the vision to have quality, cost-effective care. "Emergency physicians have got to have a seat at the table and they've got to be willing to participate in designing the way these systems will work locally," says Berg. "We are well-positioned to help determine appropriate utilization of resources to provide the most cost-effective care in our current environment."

Consider patient protections

Edward Gaines, III, JD, CCP, the vice president and chief compliance officer of MMP, an Atlanta, GA-based firm that provides billing and practice-management services to hospital-based physicians, is concerned that ACO models could undermine some of the patient protections that have been built into the Emergency Medical Treatment and Labor Act (EMTALA) provisions.

"If I think that I am having an MI (myocardial infarction), I don't have to call around town to find out which groups or hospitals are in-network. I just go and present myself and the ED personnel take care of me. So how does all of that change if I am in an ACO?" observes Gaines. "The people who sponsored these [ACO] provisions don't want unnecessary ED visits on the one hand, but on the other hand, the ED is so unique because of the EMTALA provisions and the prudent layperson provisions, and I have seen nothing in the rules thus far that addresses those situations."

Gaines adds that there is a general sense among leaders in emergency medicine practice management that the ACO concept sounds a lot like capitation. "We have been there before with varying degrees of implementation," he says. "[Policy-makers] are wanting to change practice patterns from a fee-for-service concept to something else, but I am not, by any means, sure what that something else is."

Further, while the idea of shared benefits sounds good, Gaines points out that this type of arrangement adds considerable complexity to billing and reimbursement. For example, Gaines observes that emergency physicians who are involved with Medicare's ACE (Acute Care Episode) demonstration are having to wait much longer than the requisite 14 days to get paid for claims because the payments are bundled along with the other Medicare Part B service providers, as well as the hospitals, so it is taking much longer to sort it all out.

Further, Gaines has questions about what would happen to shared benefits under the ACO model if just one component of a patient's care falls short of recommended standards. "If the patient has to have a valve replaced, and cardiology does not meet its quality metric, is the ED physician going to be penalized for that because he or she is part of this greater entity called an ACO?" Gaines adds that he is anxious to see how such issues will be ironed out.

Get in on the ground floor

Jeffrey Bettinger, MD, FACEP, founder of Pinecrest, FL-based BSA Healthcare, a company that specializes in the billing and reimbursement arena for emergency medicine practice groups, has concerns about the move toward ACOs too, but sees ACOs having a much more profound impact on non-emergency medicine practices. "ACOs and global payments are really pushing a lot of [PCPs and internists] into an employed status. And I think some emergency physician groups will be slightly prodded to move in that direction as well, but most emergency groups are so facile in their ability to adapt to new arrangements that I don't think ACOs or global payments are going to force the issue other than to a mild degree," says Bettinger.

Nonetheless, Bettinger insists that this is no time for ED managers to sit on the sidelines in wait-and-see mode. "Right now, they need to be knocking on the door and speaking to whoever is in charge of these global types of systems at their hospitals, and letting them know that they are interested in cooperating and that they want to be involved in the decision-making process," he says. This may involve sitting on an ACO board or participating in some other type of governance structure, says Bettinger, but he advises colleagues to make sure they are "almost leading the hospital planning process."

"A much bigger issue is going to be global payments, which already exist in some private payer arrangements," adds Bettinger. "Those are going to become bigger and bigger, and emergency physicians need to be on the ground floor of however their hospital is going to prepare and plan for those."


  • Dennis Beck, MD, FACEP, President and CEO, Beacon Medical Services, Aurora, CO. Phone: 303-306-7783.
  • Jeffrey Bettinger, MD, FACEP, Founder, BSA Healthcare, Pinecrest, FL. Phone: 888-568-4993.
  • Edward Gaines, III, JD, CCP, Vice President and Chief Compliance Officer, Medical Management Professionals, (MMP), Atlanta, GA. Phone: 800-895-0002.
  • Elijah Berg, MD, President of the Emergency Physicians Group at Melrose-Wakefield Hospital in Melrose, MA. Phone: 781-979-3000.

ACOs: An outline of how they will work under the proposed rule established by the HHS

Under the proposed rule for the Medicare Shared Savings Program, the Department of Health and Human Services (HHS) has set out to define how physicians, hospitals, and other care providers can establish accountable care organizations (ACOs) and potentially reap financial rewards based on clinical and financial criteria.

The proposed rule offers ACOs two different models: one in which ACOs stand to gain a smaller share of benefits but no risk of loss for two years, and then in the third year transition to accepting risk; in the second model, organizations take on more risk, but also qualify for a higher proportion of shared savings from the start of the program.

The proposed rule further stipulates that ACOs will be governed by panels that primarily include representatives from the different organizations that have banded together to form the ACO, but also include representation from the community and Medicare patients served.

"Making sure that patients and all health care providers have the right information at the point of care will be a core competency of ACOs," stressed, Donald Berwick, MD, MPP, the administrator of CMS, in making his case for ACOs in the New England Journal of Medicine when the proposed rule was unveiled.1 "Held to rigorous quality standards, ACOs will be expected to be proactive in their orientation and to regularly reach out to patients to help them meet their needs for preventive and chronic health care."1

Berwick further noted that patients who seek care at their designated ACO will know that their physicians are part of the ACO, but that as beneficiaries of fee-for-service Medicare, patients will be free to seek care from any Medicare provider they choose. Under the proposed rule, ACOs must notify beneficiaries that they are participating in the ACO program when they seek care services.

Initially, HHS anticipates that 75-150 ACOs will be formed and approved by CMS, and that these entities will care for 1.5 million to 4 million Medicare beneficiaries. Further, regulators project that these organizations will receive as much as $800 million over three years by spending fewer dollars on beneficiaries than CMS expects while also meeting quality standards. However, regulators also estimate that some ACOs will end up repaying as much as $40 million to the government for care that either fell short of quality standards or was more expensive than CMS expected. The new model is expected to save CMS between $170 million and $960 million in the first three years, although regulators expect these numbers to grow substantially as more ACOs are established.

Comments are being accepted on the proposed rule until June 6, and CMS expects to issue a final rule by the end of the year.


  1. Berwick D. Launching accountable care organizations: The proposed rule for the medicare shared savings program. N Engl J Med 2011;364:e32.