Questions have arisen in recent months about Accountable Care Organizations (ACOs). What are they? Will they result in a lessened emphasis on Patient-Centered Medical Homes (PCMHs)? Will ACOs have a positive or negative impact on the medical assisting profession, and CMAs (AAMA) in particular? The purpose of this article is to answer these questions in general terms without going into the technical details of the Medicare Shared Savings Program and ACOs.

What is an ACO?

In compliance with a directive in the Affordable Care Act, on March 31, 2011, the Centers for Medicare and Medicaid Services (CMS) issued regulations regarding the Medicare Shared Savings Program and the role of Accountable Care Organizations in this program. The regulations include the following language:

Under the proposed rules, an ACO refers to a group of providers and suppliers of services (e.g., hospitals, physicians, and others involved in patient care) that will work together to coordinate care for the patients they serve in Original Medicare [Medicare Parts A and B]. The goal of an ACO is to deliver seamless, high-quality care for Medicare beneficiaries, instead of the fragmented care that often results from different providers receiving different, disconnected payments. The ACO would be a patient-centered organization where the patient and providers are partners in care decisions.1 (emphasis added)

The ACO concept is interesting in that it combines free market principles of rewarding eligible and participating health care providers (both individuals and institutions) for cost savings, and penalizing them for inordinately high costs, within the context of a large federal program. Consistent with free market thinking, providers and patients can choose to either participate or not participate in the Medicare Shared Savings Program.

From the regulated market perspective, on the other hand, those participating providers who: (1) meet the quality of care standards established by the CMS; and (2) demonstrate costs that are less than the benchmark to be established by the CMS will share in Medicare’s cost savings. Those providers whose costs exceed the benchmark, however, will be penalized by having to bear a part of the cost overruns.

Providers eligible to participate in an ACO are determined by the Affordable Care Act and regulations of the CMS. Note the following from a CMS publication:

An ACO may include the following types of groups of providers and suppliers of Medicare-covered services:

  • ACO professionals (i.e., physicians and hospitals meeting the statutory definition) in group practice arrangements,
  • Networks of individual practices of ACO professionals,
  • Partnerships or joint ventures arrangements between hospitals and ACO professionals,
  • Hospitals employing ACO professionals, or
  • Other Medicare providers and suppliers as determined by the Secretary [of Health and Human Services].1

The proposed CMS rule would permit Accountable Care Organization providers to continue to be reimbursed according to the standard procedures under Medicare Parts A and B. Not only is participation in an ACO voluntary on the part of Medicare beneficiaries/patients, but also beneficiaries would not enroll in a particular ACO. Medicare patients would be free to choose which provider they will see for care. An ACO “would be prohibited from using managed care techniques, such as limiting the beneficiary to certain providers, utilization management, or requiring prior authorization for services for Medicare beneficiaries.”1

ACOs and PCMHs

As discussed in the March/April 2009 issue of CMA Today,2 the Joint Principles of the Patient-Centered Medical Home3 of the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Physicians, and the American Osteopathic Association define the Patient-Centered Medical Home (PCMH) as follows:

The Patient-Centered Medical Home (PCMH) is an approach to providing comprehensive primary care for children, youth, and adults. The PCMH is a health care setting that facilitates partnerships between individual patients, and their personal physicians, and when appropriate, the patient’s family.

The following are the seven principles that describe the characteristics of the PCMH:

  • Personal physician
  • Physician-directed medical practice
  • Whole person orientation
  • Care is coordinated and/or integrated
  • Quality and safety
  • Enhanced access
  • Payment reform2

What is the difference between an ACO and a PCMH? The following definitions may help.

Accountable Care Organizations exist only in the context of the Medicare Shared Savings Program and are groups of providers and suppliers that work together to coordinate the provision of quality care for Medicare A and B beneficiaries. Successful ACOs not only facilitate effective and efficient care for Medicare patients, but also lower Medicare costs by reducing duplicative and ineffectual care, and consequently are rewarded by sharing in the overall reduction of Medicare costs resulting from their efforts.

Patient-Centered Medical Homes can exist in all delivery organizations within the American health care system, including ACOs. The PCMH philosophy shares with the Medicare Shared Savings Program and its ACOs the ultimate goals of quality and efficient provision of health care. But, the PCMH movement also provides infrastructural elements, human resource configurations, strategies for coordination of care among providers, and patient access mechanisms that can enable an ACO to achieve the objectives of the Shared Savings Program.

Another way to state the relationship and differences between ACOs and PCMHs is as follows: ACOs are part of a government incentive mechanism for providing quality, non-duplicative, efficient health care for Medicare beneficiaries. The PCMH movement cuts across all health care systems and offers quality-enhancing and cost-maintaining principles and practices that can be adapted and employed in a wide variety of delivery contexts.

Impact of ACOs on the profession

What significance, and potential impact, will the Medicare Shared Savings Program and its ACOs have on the medical assisting profession and CMAs (AAMA)? Accountable Care Organizations provide yet another opportunity for CMAs (AAMA) by aspiring to achieve the following:

  • Uncompromisingly excellent quality of care
  • Elimination of wasted time and duplication of effort
  • An unbending spirit of adaptability to new and rapidly changing circumstances
  • Kindness, empathy, and unmatched listening and speaking skills with patients

Any delivery structure, philosophy, or system that emphasizes such processes will provide a ready opportunity for the “CMA (AAMA) Advantage”4 to shine forth ever more brightly.

Questions? Contact Donald A. Balasa, JD, MBA, at or 800/228-2262.