New Phase of Obamacare: Next Generation Medical Care

Accountable Care Organizations give doctors and hospitals new risks and new rewards
March 10, 2015 Updated: January 31, 2016

One medical part of the Affordable Care Act has not sparked outrage, or Supreme Court cases, or congressional efforts to repeal it. It’s an alphabet soup of medical and financial terms and acronyms, but in English, it means paying doctors and hospitals to help us get well, instead of blindly paying them for office visits and procedures. The idea is to pay for quality, not just quantity. The hope is to provide quality care at a lower cost.

The idea is to pay for quality, not just quantity.

The Department of Health and Human Services announced The Next Generation Accountable Care Organization (ACO) Model of payment and care delivery on March 10. “This ACO model responds to stakeholder requests for the next stage of the ACO model that enables greater engagement of beneficiaries, a more predictable, prospective financial model, and the flexibility to utilize additional tools to coordinate care for beneficiaries,” said Dr. Patrick Conway, deputy administrator for Innovation and Quality and chief medical officer for Centers for Medicare & Medicaid Services. 

The pioneer ACOs were designed to study how it worked when money was more flexible, and when doctors could focus services on preventing illness or helping people get well. For example, they could offer skilled nursing care at home to a person who had not been to the hospital, and maybe keep that person out of the hospital.  Now a person can only get a nurse visit paid for if he or she has recently been discharged.  But what if a nurse could keep a sick person from getting sicker? What if visits could keep a frail senior out of a nursing home, or prevent a diabetic person’s foot from getting infected? What if a patient’s mental, emotional, and behavioral health issues could be addressed through his primary care doctor’s practice?

Medical practices or hospitals could drop out at any time, according to Conway, and many did. But many stayed because the new way gave them more freedom to give “comprehensive primary care,” said Conway. 

“I finally got to practice the way I’ve wanted to practice. I finally got to focus on the whole patient,” Conway said one doctor told him about working in a pioneer ACO. 

One of the benchmarks ACO’s are supposed to use is reduction of harm, for example by working to eliminate hospital-acquired infections. Conway said the ACOs reduced such infections by 17 percent, and that it translates into at least 50,000 lives saved. “I still remember an infant I cared for who died from a central line infection,” he said. “Central line infections are down,” in ACOs. 

The Next Generation ACO Model is for ACOs that are experienced in coordinating care for populations of patients. It will allow them to assume higher levels of financial risk and reward than are available under the current Pioneer Model and Shared Savings Program (MSSP), according to HHS. If they do well at taking care of patients, they will be paid more. But they could also be paid less if their patients get sicker. 

“The goal is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries,” according to HHS. 

Between 15 and 20 groups are expected to enroll and try the new way of delivering care and getting paid for it. The first round of applications are due May 1, and another set will be allowed to enroll in 2016.