The Affordable Care Act (ACA) improves the health care delivery system through incentives to enhance quality, improve beneficiary outcomes and increase value of care.  One of these key delivery system reforms is the encouragement of Accountable Care Organizations (ACOs).

Making ACO a Reality – Organization Structure

Accountable Care Organization, can be instantiated by a health plan, health care system, or a large self-insured employer.  The philosophy is that ACOs are a physician-led entity – consisting of hospitals, primary care physicians, and specialists – responsible for managing the full continuum of care and accountable for the overall costs and quality of care for a defined population, that is partnered with their health plan. CMS mandates such as ICD10 are separate from health care reform and were mandated before health care reform became law.

Quality Measures, Incentives

Since CMS 5-Star Ratings and other quality measures such as readmissions and the general health of the patient will be expressed in ICD-10, there is a mutual incentive for payors and providers to work together for better outcomes and to measure those outcomes in ICD-10.

Enabling Technology

Business Intelligence and dashboards will be key in measuring process improvements for ACOs.   ICD-10 implementation costs, while high will ultimately assist companies in getting higher payments from CMS because the granularity of the information and “specificity” will improve the precision of the Quality Measures.

Importantly, health insurance exchanges (HIE) that can facilitate the exchange between payor and provider across EMR systems, geographies, multiple providers, and settings (ambulatory, inpatient) are important.

CMS Mandates Force Cooperation

ICD-10 in turn is its own reimbursement system which encourages payor – provider working relationships.  Accountable Care organizations will have the most success when they think about coordinated care.  Coordinated care means working with trading partners and thinking about the patient experience.

Funded vs. Unfunded Mandates – Regulatory Ironies

The American Recovery and Reinvestment Act (ARRA) and the HITECH Act created incentives for adoption of electronic technology. Meaningful Use of Electronic Health Records and Health Information Exchanges are being adopted and creating tremendous wealth for American entrepreneurs.

Yet, ICD-10 implementation, which is the data standard that will populate digital containers including EMR and HIE systems, is not a funded mandate.  ICD-10 will provide the system that enables the expression of NCQA and other quality measures.

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