The Critical Importance of Quality to an ACO

July 25, 2016

The Critical Importance of Quality to an ACO

The measure of success for an accountable care organization (ACO) is the quality of patient care it provides. For an ACO, capturing shared savings is not simply a matter of keeping costs below benchmarks determined by the Centers for Medicare & Medicaid Services (CMS). The ACO must also meet specific CMS quality performance standards, in addition to controlling costs.

What are those standards? How is an ACO’s performance assessed against them? How will the standards change in the future? What role can labs play in improving the quality of care?

Our panel of ACO experts answer these questions and more as we take a deeper look at the critical importance of quality to ACO success.




Article highlights:

  • Improving the quality of patient care is the central purpose of an ACO
  • Delivering high-quality care in a cost-effective manner will help ACOs capture shared savings
  • Labs play an emerging role in helping ensure quality outcomes

Contributing Lab Leaders

Les Duncan

Les Duncan

Current Director of Operations
Highmark Home & Community Services, Highmark Inc.
Former Vice President of Accountable Care Initiatives
River Health ACO, Pinnacle Health


Joel Shu, M.D., MBA

Joel Shu, M.D., MBA

Vice President, Clinical Transformation
and Population Health
Medical Director, CHS-Beacon
ACO at Catholic Health Services of Long Island

Peter Gross, M.D.

Peter Gross, M.D.

Chairman, Board of Managers
HackensackUMC ACO

Michael Astion, M.D., Ph.D., HTBE

Michael Astion, M.D., Ph.D., HTBE

Medical Director, Department of Laboratories
Seattle Children’s Hopsital
Clinical Professor of Laboratory Medicine
University of Washington Department of Laboratory Medicine

Ground yourself in the basics of ACOs by reading
ACO 101: an introduction for laboratorians


Quality first

Improving the quality of patient care is an ACO’s reason for being. Above all else, ACOs must diligently pursue quality. It is the engine that drives performance and determines profits.

Quality is also a key imperative in the Institute for Healthcare Improvement’s (IHI) Triple Aim Framework, which recommends the development of systems like ACOs to address three key dimensions of health care:

  1. Improved patient care experience 
  2. Improved health of populations
  3. Reduced per capita health care costs

Note that two of the three dimensions pertain to quality, not cost. For an ACO to succeed it must deliver high quality care across the board, first and foremost. If it fails to do so, it will pay a price.

34 Quality Measures

Under its Medicare Shared Savings Program (MSSP), CMS evaluates ACO performance across 34 quality measures categorized under four domains. Click each of the following domain boxes to learn more.

See references at the end of this article for full list of quality measures. 

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Complete and accurate quality data

CMS establishes its quality benchmarks based on three years of Medicare fee-for-service data. This includes data reported through the Physician Quality Reporting System (PQRS), MSSP, Pioneer Model ACOs and other sources.1

ACOs are required to report their quality data “completely and accurately” for the reporting year. CMS then evaluates the ACO’s performance based on those data and assigns points to the ACO on a sliding scale for each of the measures.1

According to Les Duncan the quality measures CMS provides may not always be the most current. Fortunately, ACOs have the ability to communicate concerns about outdated measures to CMS, though their performance will still be evaluated against published target metrics for the reporting year.

Strategies for improving quality

Achieving CMS quality measures requires an ACO to implement strategies that elevate care in key areas. The nature of those strategies will depend a lot on the structure of the ACO itself and the demographics of the population it serves. A vertically integrated ACO with a largely healthy and active patient base, for example, will initiate quality measures that are much different than one made up of individual physicians who serve a more sedentary population.

A good place to start is with an analysis of at-risk patients. ACOs can run the claims data they receive from CMS through an analytical engine. The results will identify patient segments with critical illnesses such as COPD, congestive heart failure (CHF) and diabetes. Once identified, the ACO might develop targeted programs designed to improve care by meeting quality benchmarks in a greater percentage of these patients.

Physician performance protocols

An ACO should also analyze individual patient records to spot troubling trends and correct them. For example, an ACO might have two physicians from the same geographical area treating patients with diabetes. One physician’s diabetes-related costs may be well under control while the other doctor’s are sky high. The ACO should find out why. What is the cost-effective doctor doing that the other is not? How are they treating their patients differently?

Once these questions have been answered, the ACO can develop evidence-based protocols for diabetes care. If both physicians follow the same protocols, chances are the second doctor will begin to control costs better as the quality of care improves.


Directing patients to high-quality care

Claims data are powerful. Used properly, they can help ACOs direct patients to the best possible care for the best possible outcomes.

By analyzing claims data, an ACO knows which hospitals in their area are the most expensive and which ones have the best outcomes. With this information, physicians can send patients to the most cost-effective hospitals with a proven record of positive outcomes. So a patient with a hip fracture, for example, would have a greater chance of getting surgery that gets her back on her feet sooner and keeps her out of the hospital longer.

Future trends

Today’s quality measures for ACOs are very process-oriented. They’re designed to assess how well an ACO cares for patients through the processes and procedures it puts in place.

Our lab leaders see a trend emerging toward more outcome-based measures. Focusing on outcome measures could potentially improve the health of ACO patient populations. However, it also presents some reporting challenges for ACOs that will need to be skillfully addressed.

Where does the lab fit in?

Because ACOs are in a nascent state, the role labs play in improving quality is just beginning to be defined. Our lab leaders identify several important areas where labs might improve processes and outcomes. These include:

  • Predictive diagnostics – developing lab tests to predict which patients are most at risk for high-cost conditions, allowing for more vigilant care 
  • Test utilization management – developing test-ordering algorithms for physicians that mitigate the risk of over- or under-ordering
  • Efficient delivery of lab results – including at the point of care, to facilitate timely and meaningful follow-up discussions
  • Test retrieval – taking steps to help ensure physicians retrieve test results and communicate those results back to their patients

Laboratorians can create enormous value in the pre-analytic and post-analytic phases, areas where there is arguably less focus today than there should be. By lending their expertise in finding solutions related to care logistics, laboratorians can help improve ACO quality.

Look for more articles related to ACOs and where labs fit in, coming soon from LabLeaders.


Reference: 1. CMS. Medicare shared savings program quality measure benchmarks for the 2016 and 2017 reporting years. Accessed June 26, 2015.

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