While many ACOs are enjoying success, that hasn’t been the case for everyone—especially when it comes to CMS-sponsored programs. As of September 2014, only 19 of the original 32 organizations that joined the Medicare Pioneer Accountable Care Organization program were still involved. Despite the program’s total savings of more than $384 million over two years, the economic model didn’t work for all participants. Some of the Pioneer organizations weren’t able to make large enough improvements in utilization, quality, and cost reduction to meet their benchmarks, which means they weren’t eligible to receive a share of the savings. Furthermore, two of the original 32 participants suffered losses totaling roughly $4 million in 2013. Results like those have many healthcare providers nervous about joining ACOs, and with good reason. After all, doing so is a new—and potentially risky—venture. So, how do you know if it’s the right move for your clinic?

Unfortunately, there’s no easy rubric to determine which—if any—ACO works for your specific practice. At the moment, the future of payment reform is murky, at best, so it’s unclear how—or if—ACOs will figure in to pay-for-performance in the long run. To make matters even more complicated, the ACO structure continues to evolve on a trial-and-error basis as participating organizations experience, and learn from, their mistakes. Plus, given the novelty of ACOs, there’s no long-term data on the ROI for private practice PTs who join an ACO. Bottom line: If you’re considering making the switch to an ACO, you must thoroughly research your options.

First, find out which ACO(s) serves your area. You may want to talk to your referring physicians to see if they plan to join—and ask them how they came to their decisions. Then, speak to the ACO administration yourself. Dig in to the risks and rewards, including the payment structure, referral patterns, the necessary upfront and long-term investment, and the benefits of joining.

ACO Analysis

With help from the APTA, I’ve put together a list of specific questions to ask the ACO—and yourself—during your assessment process:

  • Do the mission, vision, and values of the organization align with those of your practice?
  • Is the ACO leadership team innovative, progressive, and collaborative—or is it traditional, conservative, and hierarchical?
  • What is the organizational structure of the ACO?
  • How large (in terms of the number of providers and patients) is the ACO, and what geographic area does it cover?
  • What are the ACO’s long-term plans for consolidation? Will you have the opportunity to become a partner, or will you be pressured to become an employee?
  • Does the ACO have a quality reputation and an attractive brand identity?
  • Does it have any gaps in service?
  • Does the ACO have a strong physical therapy management team in place?
  • Does the organization have difficulty recruiting and retaining PT employees?
  • How does it currently (or plan to) integrate services across the continuum (e.g., sites, providers, and diagnoses), and how well does it manage transitions of care (i.e., from acute hospital to home care)?
  • What is the ACO’s growth strategy?
  • What are its EMR requirements?
  • Does the ACO have experience with risk-sharing (not fee-for-service) payment contracts?
  • What is the financial health of the organization?
  • Would you be proud to be associated with this organization?

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Community Cross-Examination

Don’t forget to evaluate your community. You’ll need to determine whether the population has the appropriate health and disease demographics, geographic distribution, economic demographics and trends, and patient needs for ACO participation to be a lucrative option for your business. Here’s some food for thought:

  • What does your competition plan to do?
  • Will you lose significant business if you do not become involved with the ACO?
  • Can you survive without becoming involved in the ACO?
  • Is your client base loyal to your practice?
  • Would a significant number of your current patients/clients enroll in the ACO?
  • Would joining an ACO make it more difficult to focus on care for those patients who aren’t enrolled in the ACO?
  • Could the community support an out-of-network or cash-based model?
  • Are there non-ACO growth opportunities for your practice?

Practice Appraisal

Finally, consider your own practice. Even if the ACO seems like a sure thing—and your community is set up to support your participation—you must still carefully consider whether or not your clinic’s internal and external environments are the right fit for an ACO. Keep in mind that as a member of an ACO, you’ll need to demonstrate your value through:

  • Outcomes
  • Quality measures and reporting
  • Patient satisfaction
  • Cost per episode of care
  • Relevant research-based evidence

Are you prepared to not only provide this information, but also use it to improve your practice and level of care, control costs, and increase efficiencies? If so, great! But that’s just one piece of the puzzle; you must dig deeper to fully understand the viability of an ACO partnership for your practice:

  • What is your payer mix?
  • If you choose not to partner with an ACO in your area, how much will your practice be affected financially?
  • Do the mission, vision, values, and business model of your practice support a partnership with an ACO?
  • Will your existing relationships help with the process of forming a partnership?
  • What is your risk tolerance?
  • Do you or your leadership team possess the business acumen for sophisticated contracting arrangements?
  • Do you have good legal and financial advisors?
  • Are you willing to consider consolidation/fully integrating your practice with the healthcare organization?
  • What are your EMR capabilities? Could you integrate with the ACO’s system?
  • How broad and deep is your clinical and management talent? Do you bring anything unique to the table?
  • Is your practice open to new concepts, and is your staff receptive to change?
  • Do you have a strong clinical reputation in your community?
  • Do the direct access laws in your state support the role that you would hope to play in the ACO?
  • Would your practice fill any gaps in new and different areas?
  • Are you prepared to engage in risk-sharing or outcome-based payment models? Do you know (or are you willing to learn) how to negotiate for payment within these models?
  • Are you willing and able to grow?
  • Do you have the financial strength and ability to raise capital if needed?
  • Are you willing to partner with other practice(s) in your area to provide full coverage?

As you can see, you should not take lightly the decision to join an ACO. If you can, speak with other private practice PTs who have already joined ACOs to get their advice. However, keep in mind that their ACO experiences are unique to them and may not be applicable to your own clinic. If you’re interested in partnering with an ACO, be sure to consider all the potential risks and rewards to your particular practice. Physical therapy is a natural fit with ACOs’ triple-aim to improve health for populations, improve care for individuals, and control healthcare costs—but that doesn’t mean an ACO is a natural fit for every physical therapy private practice, so look before you leap.