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The Ingredients of Success in a Medicare Accountable Care Organization
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The Ingredients of Success in a Medicare Accountable Care Organization

Peter A. Gross, MD; Mitchel Easton, BS; Edward Przezdecki, MBA; Morey Menacker, DO; Edward Gold, MD; Vinita Chauhan, MBA, PhD; Juliana Hart, BSN, MPH; Ihor Sawczuk, MD; Robert C. Garrett, MPH; and Robert L. Glenning, CPA
For 2 successive years, the Hackensack Alliance Accountable Care Organization achieved cost savings and maintained quality by using physicians with patient-centered medical homes and nurse care coordinators focused on high-risk patients.
In the initial design for our ACO, the selection of the membership was critical. We decided to select practices that were already certified as patient-centered medical homes (PCMHs). A PCMH is defined as “a way of organizing primary care that emphasizes care coordination and communication to transform primary care into ‘what patients want it to be.’ Medical homes can lead to higher quality and lower costs, and can improve patients’ and providers’ experience of care.”13,14 The National Committee for Quality Assurance grants the certification. For those physicians who want to join the ACO but are not certified as PCMHs, we insist that they acquire the software to practice with an electric health record and become certified as a PCMH within 1 year. We agree to provide, free-of-charge, a trainer to facilitate their acquisition of PCMH certification.

2. Providing a Nurse Care Coordinator

The other major commitment we made initially was to provide a nurse care coordinator for the larger practices. Their goal is to identify the high-risk patients, get to know them well, and assure those patients relate to them whenever they felt ill to avoid the knee-jerk response of going to the ED immediately.

To minimize waste and avoid unnecessary hospitalizations, the combination of physician and nurse coordinator working in concert enabled the identification of areas of wasteful spending, creation of work plans, and provision of timely appointments to see the PCP team.

3. Informing About CMS Quality Measures

The physicians and nurses were informed of the 33 quality measures required by CMS. It was made clear that compliance with these measures determines whether savings generated by more efficient care will accrue to the ACO.

4. Identifying a Data Analytics Firm

The next part was not so easy. We knew that information would be the key to success for this project. Consequently, we had to identify a data analytics firm to help determine which practices were and were not doing well. This information came from CMS in several reports—namely, the CCLFs and Financial Reconciliation Reports.15 We identified 3 companies—Health Endeavors, Verisk Health, and Milliman—that are helping us with various parts of our data analysis. The data from Verisk Health and Milliman go through a second filter at Premier Inc, which helps us identify key areas of required attention and areas where more investigation is needed.

5. Using the Data

Using these data analytics firms, we found from the Verisk Health analysis that our risk score for our population was higher (24.34) than many ACOs (17.17). This factor, in turn, meant that CMS determined that our historical expenses should be relatively high.

6. Examining Regional Differences

Although there is some evidence that ACOs with higher initial benchmark expenditures are more likely to be able to reduce expenditures, 16 this factor did not guarantee a reduction in expenditures for all high-cost ACOs. Regional differences need to be examined more closely to fully understand this phenomenon.

There are many areas where CMS and the ACOs themselves need to improve their programs, but time does not permit serious consideration of all these areas. For CMS, some of the areas, for example, include revision of the retrospective attribution of beneficiaries, reducing the complexity of determining cost savings, reexamining the “normal variation” in savings and losses, considering regional effects on cost, the role of merit-based incentive payment system, and competition from other alternative payment models such as bundled payments and the comprehensive primary care initiative. ACOs, themselves, need to deal with leakage of beneficiaries to other ACOs, performing annual wellness visits on all assigned beneficiaries, interconnectivity of numerous EHRs, choosing other areas to reduce waste such as skilled nursing facilities and other post-acute care options, and selecting appropriate data analytic software.


The MSSP’s ACOs appear to offer ample opportunity to improve the quality of care for the patient while at the same time, reduce the cost of care. Initial factors that should facilitate these changes are having physicians certified as patient-centered medical homes by NCQA and providing financial support for increased care coordination. In this setting, high-risk patients are likely to be seen more often in the office in order to prevent deterioration and to better manage their chronic conditions. PCMHs and care coordinators will provide the greatest opportunity to impact a large segment of medical care costs by decreasing hospital admissions, readmissions, and ED visits, while maintaining a higher quality of healthcare.

We should emphasize that we do not change physician practice, we change physician behavior. By creating the appropriate interventions, we eliminate waste in our bloated healthcare system. We learn to address patient needs better. Although we are still good at disease management, we learn how to perform health management better from the PCMH model.


The authors appreciate the editorial assistance provided by Regina G. Gross, MA.

Author Affiliations: Hackensack Physician-Hospital Alliance Accountable Care Organization, LLC (dba HackensackAlliance ACO) (PAG, ME, MM, EG, IS, RCG, RLG), Hackensack, NJ; Hackensack University Medical Center (PAG, ME, MM, EG, IS, RCG, RLG), Hackensack, NJ; Rutgers New Jersey Medical School (PAG, IH), Newark, NJ; Premier Inc (EP, VC), Charlotte, NC; Verisk Health Inc (JH), Salt Lake City, UT.

Source of Funding: The Hackensack University Medical Center supplied the startup and continuation funds.

Author Disclosures: Dr Sawczuk is an employee of Hackensack University Medical Center CMO. MS Hart is an employee of Verisk Health. Mr Garrett is a member of the Hospital and Network Board of Hackensack and is the CEO of Hackensack University Health Network. The remaining authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (PAG, EG, MM, VC, IS, RCG, RLG); acquisition of data (PAG, EG, ME, EP, VC); analysis and interpretation of data (PAG, EG, ME, MM, EP, VC, JH); drafting of the manuscript (PAG, MM, JH); critical revision of the manuscript for important intellectual content (PAG, ME, MM, JH); statistical analysis (PAG, ME, EP, VC); provision of study materials or patients (PAG, EG); obtaining funding (PAG, IS, RCG, RLG); administrative, technical, or logistic support (PAG, EG, ME, EP, VC, IS, RCG, RLG); and supervision (PAG, EG, MM, IS, RCG, RLG).

Send Correspondence to: Peter A. Gross, MD, Chair, ACO Board of Managers, 30 Prospect Ave, Hackensack, NJ 07601. E-mail:

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