How Medicare Accountable Care Organizations Can Coordinate Care

The Centers for Medicare & Medicaid Services (CMS) created the Shared Savings Program (SSP) to encourage physician groups, hospitals, and other healthcare providers to support more coordinated, high-quality, and cost-effective care. 

SSPs focus on chronic conditions: Nearly 80% of Medicare spending is delivered to beneficiaries with five or more chronic conditions. Also, nearly 99% of expenditures are for beneficiaries with at least one, so these alternative payment models (APMs) emphasize chronic disease management.

SSPs focus on care coordination: According to research by the RAND Corporation and others, effective care coordination is vital, considering that a single medical condition can require up to 50 interactions between the patient and their care team in three months. SSP participants work to streamline care, reduce duplicate or overutilization, and drive efficiency.

SSPs focus on lowering the cost of care: Research shows that the average annual Medicare spending for beneficiaries with one or two chronic conditions is more than double that for those with no chronic diseases. Plus, Medicare expenses for beneficiaries with five or more chronic diseases are nearly nine times the average for a person with no diagnosed chronic conditions. SSP participants seek to decrease Medicare and beneficiary costs.

Medicare Accountable Care Organizations make up the largest category of APM participants

Alternative payment models enable combinations of value-based and fee-for-service payments. With an emphasis on Traditional Medicare beneficiaries, the three APM initiatives include:

• Shared Savings Program (SSP): The permanent and most extensive ACO program focusing on Traditional Medicare beneficiaries
• ACO REACH Model: Focuses on increasing access to care while closing racial and ethnic disparities for underserved populations
• Kidney Care Choices Model: Focuses on beneficiaries with chronic kidney and end-stage renal disease

Participation in CMS’ Accountable Care Organization initiatives continues to grow in 2024, as shown in Figure 1. 

Figure 1: 2024 Medicare ACOs initiatives. 

In 2024, more than 13.7 million Traditional Medicare beneficiaries are being cared for through an ACO. This is a three percent increase since 2023, indicating that ACOs now serve nearly half of all traditional Medicare beneficiaries.

Managing chronic conditions is foundational to Accountable Care Organizations

Medicare supports a wide range of chronic disease management and prevention services, including screening tests and care management services like Chronic Care Management (CCM), Annual Wellness Visits, and Transitional Care Management.

Research in 2023 by the Advisory Board demonstrates that beneficiaries enrolled in an ACO utilizing CCM experienced reduced hospitalization, nursing home stays, and in-person visits. 

Other ACO examples highlight the value of CCM to achieve the triple aim of healthcare:

• Provider interviews found that CCM decreased hospitalizations and emergency department visits 
• Research highlighted an ACO that achieved a 20% decrease in hospital admissions and a 13% decrease in emergency room visits for patients enrolled in CCM
• Analysis of care management programs focused on patients with elevated but modifiable risks revealed that ACO care management was associated with substantial reductions in hospitalizations, ED visits, and Medicare spending
• Other research studies found admission and ED reductions as low as 6% and as high as 20%
• According to the National Rural Accountable Care Consortium, CCM has been shown to reduce costs by 20-60%

Additionally, as shown in Figure 2, the ACO model enables a variety of providers, including physician-led, hospital-led, skilled nursing-led, or clinically-integrated-network-led ACOs, to transition from caring for individual patients to addressing the health needs of populations.

Figure 2: The ACO transition process.

ACO-delivered care management provides an ideal vehicle for a variety of providers to enter value-based care, experiment with new levels of risk, and grow in population health management capabilities. 

Two ACO strategies for maximizing care coordination 

ACOs can use care coordination to help them achieve their goals in two ways:

1. Through Medicare care management programs—like CCM—ACOs can use fee-for-service revenue to fund an ACO start-up and test the model before inviting more provider members to join.
2. By leveraging technology and support across ACO members, existing ACOs can implement new Medicare care management programs—like Transitional Care Management or Annual Wellness Visits—at scale. Tech-enabled care management allows ACOs with multiple practice members to achieve economies of scale while tapping into a larger pool of expertise.

With this approach to care coordination, ACOs can achieve their care, cost, and efficiency goals but with a more strategic focus on the business and operational sides. This provides needed funding for start-up and growth and gives the ACO structure a healthy financial foundation. 

How software enables care management for Accountable Care Organizations

According to the American Academy of Family Physicians’ (AAFP) ACO Planning Guide, “In pursuit of the Quadruple Aim, ACOs need to engage in continuous practice transformation, especially in key areas including physician engagement, staffing structure, standardization of evidenced-based care, care coordination, care management, and patient engagement.”

Software helps ACOs achieve all these goals while ensuring that leaders and care managers can access analytics that drive improved performance in clinical care, operations, finance, and compliance.

In particular, software offers functionality in six areas suited to the unique care management needs of ACOs:

• Performance metrics and cost reporting: Software can streamline tracking and documenting complete and accurate quality measures required to assess ACO performance. Data captured by or integrated with a platform allows physicians to identify patients needing care management, take proactive steps to support patient health, close care gaps, and measure the ACO’s progress against benchmarks.
• ACO oversight across members: Group functionality and analytics enable leaders to monitor and report on essential clinical, operational, financial, and compliance metrics across individual and all ACO members. 
• Medicare Care Management compliance and billing: Software provides easy time logging, data capture, and automated billing documentation to ensure compliance with Medicare’s care management rules and CPT code requirements.
• Timely interventions: Data analytics from evidence-based assessments, dashboards, and alerts highlight which patients need timely attention from care managers and care teams.
• Personalized care plans: Creating standardized yet tailored care plans is straightforward and can be quickly updated through regular touchpoints. 
• Data integration and interoperability: Cloud-based software enables integrated connectivity with electronic health records (EHR), data exchanges, educational resources, remote monitoring devices, and mobile applications, providing an inclusive patient view.

Through comprehensive technology solutions, healthcare organizations can assess the value of creating a new ACO or equip their ACO for scaling successfully. 

Key questions answered

Why is care management important to ACOs achieving the Triple Aim?

Care management is vital to Accountable Care Organizations (ACOs) achieving the Triple Aim, which focuses on improving patient experience, enhancing population health, and reducing healthcare costs.

Effective care management ensures coordinated care across different healthcare settings, leading to better patient outcomes and satisfaction. By managing chronic conditions, promoting preventive care, and facilitating smooth transitions between care settings, ACOs can minimize hospital readmissions and emergency visits.

This proactive approach not only improves the quality of care but also controls costs by preventing complications and unnecessary interventions. Thus, care management is essential for ACOs to achieve the Triple Aim goals efficiently and sustainably.

How can ACOs use care management to maximize their value?

ACOs can maximize their value through care management in two key ways.

First, by implementing comprehensive care coordination, they ensure seamless transitions between different healthcare settings, such as hospitals, primary care, and specialty care. This reduces readmissions and prevents gaps in care, leading to better health outcomes and cost savings.

Second, ACOs can focus on preventive care and chronic disease management. Proactively managing patients with chronic conditions and emphasizing preventive measures can reduce the incidence of acute episodes and hospitalizations. This approach improves patient health and reduces the overall cost of care, thereby maximizing the value delivered by the ACO.