ACO vs PCMH: What is the difference?

ACO vs PCMH: What is the difference?

Health IT Analytics recently reported that Blue Cross Blue Shield Association’s (BCBSA) value-based care programs, namely its accountable care organizations (ACOs) and patient-centered medical homes (PCMHs), are earning impressive marks in care and cost quality metrics.

Launched in 2015, BCBSA’s Blue Distinction Total Care Program – the umbrella program for BCBSA’s ACOs and PCMHs – is the American healthcare industry’s largest network of value-based care programs. Since the network’s inception, some of its achievements include a 10 percent reduction in emergency room visits and a five percent improvement in medication adherence among patients with heart disease.  

With the success of BCBSA’s value-based care program and others like it, as well as a continued focus on delivering better health outcomes at a lower cost, ACOs and PCMHs are likely here to stay. Just as likely: In the future, they won’t look exactly like they do today.

And while they share common goals and support a movement away from episodic care towards preventative, holistic care, ACOs and PCMHs are not interchangeable.

ACOs: “Medical neighborhoods” in service of the patient

An ACO can be comprised of any number of healthcare providers, including primary care physicians, specialists, hospitals and payers.

ACO members collectively assume financial responsibility for patients and patient populations entrusted to them. Meeting care quality targets at a lower cost is the key driver that binds members of an ACO together in what is sometimes referred to as a “medical neighborhood” – a nomenclature that reflects the idea that an ACO is comprised of many medical homes working together in service of the patient.

The National Association of ACOs reports that as of January 2018, there are 561 Medicare ACOs, with hundreds more Medicaid and commercial ACOs nationwide.  

According to Medical Economics, members of an ACO are offered a predetermined payment to care for and meet quality targets for a designated patient population. If the ACO meets their targets for less than the payment, it keeps the difference. Depending on the type of contract, ACOs can be responsible for any difference beyond the predetermined amount required to meet its quality targets. There are a variety of risk contracts ACOs can negotiate with payers. With all ACO contract types, however, there is a direct financial incentive to keep patient populations healthy.

What do ACOs mean for patient care?

In many ways, ACOs look similar to clinically integrated networks. In general, ACOs should:

  1. Be performance-focused and able to prove, through data, that they are improving the care quality vs. cost equation for the patient populations they serve. They must externally report on their performance, too.
  2. Have the ability to work with diverse payment systems, including episode payments, population-based prepayment (also known as capitation) and fee-for-service.
  3. Be mission-driven and committed to achieving quality and cost efficiencies. The culture and infrastructure of ACOs should support continuous improvement.   
  4. Use health information technology (HIT) in its management of patients across the care continuum. An ACO should be able to track a patient across ambulatory, inpatient and potentially post-acute care settings. HIT is a critical component of data-driven improvement, too.

While members of ACOs have reported that staff devoted to care coordination, improved data and analytics, and improved communication between healthcare providers across the continuum of care are some of the positives of belonging to an ACO, added bureaucratic requirements, referral restrictions, and the possibility of not recouping costs associated with making improvements needed to effectively structure an maintain an ACO are commonly cited as reasons why the ACO model must continue to evolve.  

PCMHs: “Medical homes” in service of the patient  

Whereas ACOs are sometimes called “medical neighborhoods,” PCMHs are often simply referred to as “medical homes.” Like a medical neighborhood, a medical home is designed to improve the patient experience, boost population health and reduce care costs.

The Patient-Centered Primary Care Collaborative reports there are about 500 public and private sector medical home initiatives being tracked nationwide.

A practice may choose to call itself a PCMH without an official certification, but many practices choose to become certified PCMHs by applying with a national accrediting body like the Joint Commission, or with a health plan or state agency. Depending on the payers in the practice’s marketplace, obtaining an official PCMH designation or certification may help the practice get better reimbursement rates.

According to the Agency for Healthcare Research and Quality, a PCMH must:

  1. Provide comprehensive care. The PCMH must meet the majority of each of its patient’s healthcare needs. It should provide preventative, acute and chronic care. A PCMH can do this by bringing together large teams of care providers at their practice or by building virtual teams, connecting their practice’s care providers with other providers and services in the community that can help meet their patients’ needs.  
  2. Be patient-centered. A PCMH must consider the patient and family’s unique needs, culture, values and care preferences. Being patient-centered means making the patient an important member of the care team and actively involving the patient in care planning and health management.
  3. Provide coordinated care. A PCMH coordinates a patient’s care across the care continuum, including specialty, inpatient, home health and community-based care. It is especially important in coordinating patient care transitions, like if a patient is being discharged from the hospital.
  4. Be accessible. A PCMH should be able to meet urgent patient needs without long wait times, provide expanded in-person hours, and provide all-hours support to a member of the care team via telephone or email.
  5. Commit to improving quality and safety. This commitment is reflected in a practice’s use of evidence-based medicine and clinical decision-support tools, its performance and process improvement measures, its focus on patient satisfaction and its population health management acumen.

The National Committee for Quality Assurance (NCQA), which has the most widely-adopted PCMH evaluation program in the country with over 12,000 practices NCQA-recognized as PCMHs, says, “A growing body of evidence documents PCMHs’ many benefits, including better quality, patient experience, continuity, prevention and disease management. Studies also show lower costs from reduced emergency department visits and hospital admissions. Other studies show reduced income-based disparities in care and provider burnout.”

While PCMHs share many of the same goals of ACOs, one of the biggest differences is that there is not always a financial incentive for PCMHs to deliver better outcomes at lower costs.

The Future of PCMHs and ACOs

In its report, “The Future of Patient-Centered Medical Homes,” the National Committee for Quality Assurance (NCQA) says that PCMHs are only the tip of the proverbial iceberg that is needed for healthcare reform. While many PCMHs are making notable strides in achieving the Institute for Healthcare Improvement’s “Triple Aim” for the patients they serve, NCQA calls on all players in the healthcare sector, including ACOs, to build on the principles on which PCMHs are based to manage the health of populations more effectively and cost-efficiently.

NCQA recognizes that what types of practices, and how many, choose to become PCMH-certified is largely dependent on the financial support PCMHs are able to garner from payers.

The future of ACOs, like PCMHs, is closely tied to how they are rewarded and what magnitude of risk they are asked to assume.

In “Heading for the exit: Rather than face risk, many ACOs could leave,” Modern Healthcare cites a survey released by the National Association of ACOs in May 2018. Of 82 ACOs that began in 2012 or 2013, 71% said they are likely to leave the Medicaid Shared Savings Program (MSSP) if forced to take on more risk.

Modern Healthcare reports that since MSSP started in 2012, participants have felt increasing pressure to take on more financial risk. Many are hesitant to do so; some because they feel they can’t do much more to control costs, more because they feel “CMS doesn’t give them enough information on patients to justify taking on risk.”

One of the chief complaints of current MSSP participants is that CMS often waits until year-end to tell ACO members which patients’ care will be taken into account in assessing whether quality and cost targets were met.

While Modern Healthcare paints a somewhat bleak picture of the future of ACOs, especially those participating in the MSSP, many others share the sentiment presented by Hospitals & Health Networks in its article, “Accountable Care Organizations: Here to Stay or Fade Away?

Authors Paul Keckley Ph.D. and Marina Karp put it this way:  “ACOs are not going away. They’re here to stay, constantly changing to respond to payers and regulators, and consistently morphing to accommodate new risk-sharing arrangements and opportunities to expand. . . ACOs are the foundation for health reforms that reduce costs while improving quality simultaneously. They’ll constantly change but they’re not fading away.”

In the continuously evolving healthcare marketplace, one that is experiencing some growing pains in the shift towards value-based care, it only makes sense that the care models designed to achieve value-based care must also continue to evolve.