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Alternatives to ACO Strategies Emerge

Doug Desjardins, June 12, 2014

While joining an ACO can be the right decision for some physicians practices, the cost savings under this model are still being tested. Some doctors are banding together as independent physician associations, which improves their ability to practice independently, but still nets them better insurer reimbursement rates.

This article appears in the June 2014 issue of Managed Care Contracting and Reimbursement Advisor.

Physicians are hearing a lot of talk about accountable care organizations as the wave of the future, with many being recruited to join and others trying to make themselves appealing with extensive metrics detailing their quality and efficiency. But what if an ACO is not right for you?

Well, you're not alone. About 60% of physicians are not committing to an ACO, according to recent research in the journal Health Services Research. There are alternatives to ACOs that can be a better choice for some physician practices, says Monica Kaden, MBA, ASA, principal with Fischer Barr & Wissinger, a ­leading accounting firm in New Jersey, and an expert in valuing medical practices.

It is not necessarily in the best interest of a group of physicians to join a hospital or ACO, or to merge with another group, if they already have good contracts with insurance companies, operate efficiently, and are profitable, she says.

"We have a client, a large medical group, that is independent, highly efficient and profitable, and has excellent insurance contracts," Kaden notes, "There is no incentive for them to join another large medical group."

All physicians, whether independent or in a group, must keep up with the demands of regulation, such as having electronic health records and meeting HIPAA requirements, Kaden says. The onus is on the physicians to make sure they are keeping up with these requirements, but if they can, she says there is no urgency to merge with others.

Many specialists, especially in New Jersey, have maintained their independence, Kaden notes—by purchasing the necessary electronic health records and making the conversion themselves.

Compliance a Concern
Many practices have a staff member who is knowledgeable about the privacy laws, HIPAA requirements, and other concerns and can ensure the practice is compliant. Having this kind of resource can make it easier for a practice to avoid ACOs or other collaborations, Kaden says.

"As long as the practice has someone or a few people whose job it is to remain current with the regulatory demands, a practice can remain independent," she says. "Many physicians would prefer to remain independent and in charge of their practices as compared to being employed."

Kaden notes that joining an ACO can be the right decision for some practices, but she cautions that the cost savings under this model are still being tested.

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