Radiology and the

Accountable Care
Organization

Introduction
Economic and political conditions have led to significant change and uncertainty
in the healthcare environment. In this paper, we explore accountable care
organizations (ACOs) and their relation to radiologists.
An Accountable Care Organization (ACO) is a healthcare delivery model that is
generally understood to involve a group of providers that agree to be accountable
for the quality, cost and overall care of a group of patients. This model represents
a shift from volume-based to value-based healthcare delivery. Most commonly
used in reference to the CMS (Medicare) ACO initiatives, the term also applies
to a spectrum of commercial payer and health delivery models.

Overview of CMS ACO Program and Commercial

ACOs
The CMS ACO initiative began with the Pioneer Model that involved participants
sharing in savings and losses. Later the Medicare Shared Savings Program
(MSSP) was introduced to give participants greater options in their share of
upside and downside risk. For radiology groups, it is important to understand
that the performance quality measures have changed over time and are likely
to change in the future. At present, only one relates directly to radiology; breast
cancer screening with mammography. In essence, economic incentives are used
to control costs while still allowing flexibility to payment structures and risk
allocation between payers and providers. [2] More information on the CMS
ACO initiative can be found in Appendix A or on the CMS website.

Very few radiology groups

actively participate in an ACO
beyond a separate fee-forservice contract with the ACO
network

The CMS ACO initiative encourages participants to negotiate outcomesbased contracts with other payers which is one driver of commercial ACO and
integrated care formation.
Most commercial integrated care systems are similar to Medicare ACOs in
that they assume responsibility for a defined number of lives from either a
large employer or insurance organization however they generally set their own
quality metrics, payment methodologies, risk and length of contracts which
vary from payer to payer.
Commercial payers involved in ACOs include but are not limited to Aetna,
Cigna, United Healthcare, Blue Cross Blue Shield.
Beyond payments, commercial payers partner with providers bringing
investment money, data, data modeling and benefits to an ACO partnership in
order to help manage patients and associated costs.

Leadership
ACOs emphasize physician leadership in order to lead quality improvements
and cost controls or reductions from a clinical standpoint. Radiologists are well
positioned to take a leadership role due to their clinical knowledge base and
broad connections as a crossroad of care that most patients pass through.

Radiology and the Accountable Care Organization

Quality Standards
Almost all ACO arrangements will have some quality standards component.
A portion of bonus payments amongst both the commercial and CMS based
ACO programs revolves around meeting these quality standards. In the case
of commercial ACOs these quality standards are agreed upon by the provider
and the payer. The aim is to improve the quality of care, patient experience
(customer service) and identify practices that improve downstream outcomes.
Radiologists must develop their own quality standards that are both meaningful
and measurable in order to ensure they are eligible for bonus payments in the
future.
We have identified several areas where quality initiatives exist or are being
investigated for radiology including:
1. Retrospective performance review (peer review)

Quality standards are designed

to eliminate the quality
concerns experienced with
early HMO attempts

2. Continuing education (CME)

3. Validation and certification (validation testing of radiology skills )
4. Volume of subspecialty exams read by subspecialists
5. Subjective quality measures aimed at improving service levels such as
referrer and patient satisfaction surveys.
Preparing quality programs and metrics ahead of time can make negotiations
more productive when forming new ACOs. Groups that have metrics in
place will have baseline measurements and an understanding of their quality
weaknesses, capabilities, and opportunities.

Patient Leakage

Collaboration with other

healthcare providers will be
a key contributor to reduce
patient leakage for radiology

Not all ACO arrangements restrict patients to in-network providers. Patient

leakage occurs when a patient receives care outside the ACO network and the
network is financially responsible for this out-of-network care. This reduces
the ACOs chances of achieving their benchmarks both in quality of care and
cost which will affect shared savings programs or other financial incentives
provided by payers. Educating providers and patients on who is within
network becomes an important step in reducing leakage. Building healthy
relationships between referring physicians and radiologists, implementing
systems such as computerized physician order entry (CPOE) in conjunction
with clinical decision support, and involving radiologists more broadly in the
clinical environment will further reduce leakage.
Most ACOs have identified controlling leakage as a primary strategy for success.
Many commercial ACOs are using narrow network plans to help their ACOs
achieve their targets. These are similar to the provider networks that existed
with HMOs whereby patients are required to seek care with a discrete group
of healthcare providers. If patients choose to go out-of-network, they are
either required to pay a significant portion, or all of the out-of-network costs.
Narrow networks occur in many of the lower cost plans in the health insurance
exchanges under the Affordable Care Act. [3]

Radiology and the Accountable Care Organization

Impact of Data and Technology

Managing claims data enables ACOs to identify and monitor key populations,
especially individuals with chronic disease in order to meet quality and efficiency
goals. Payers have much of the data providers need to manage care and the
healthcare services being used. Radiologists should be prepared to discuss
their data needs including timeliness of data transmissions when facing ACO
formation to improve outcomes. Historical claims data can be used to provide
predictive modeling in order to target services and establish performance
targets. Radiologists should also utilize their own data to understand their
current benchmarks before agreeing to specific terms and conditions.
For radiology, technology will create meaningful change in the areas of
collaboration and care coordination, cost control through appropriate utilization
and identifying high-use patients to develop improved utilization and treatment
algorithms.
Five information systems that may be used in a successful ACO. [4] [5]
1. An Electronic Medical Record (EMR) used in a consistent and
meaningful way across the accountable care enterprise to document
patients healthcare status and treatment as well as support safe,
evidence based care.
2. A Health Information Exchange (HIE) to enable sharing of patients
clinical data across disparate EMRs in the accountable care enterprise.

ACO contract terms

beyond the straightforward
compensation numbers can
affect the profitability of the
practice. Radiologists should
understand all aspects of their
operations and how the new
agreement may impact them

3. A Time Driven Activity Based Costing (TDABC) system to enable

detailed, patient-specific collection of cost data from various hospital
systems to allow ACOs to precisely understand cost of production and
revenue margins in capitated payment models.
4. An Electronic Patient Reported Outcomes (ePRO) system allows
patients to provide clinical outcomes information which is combined
with other health data to enable the complete understanding of clinical
outcomes and quality, from the patients perspective.
5. A Data Warehouse (DW), which is central to enabling the analysis of
data collected in the other information systems. This enables detailed
analysis to identify downstream outcomes, dashboard reporting and
trending.
Of all components in the IT network, the DW is the most critical as it aggregates
all other systems and allows integration and analysis of clinical, financial and
patient reported data in a single repository.
Radiologists do not need to be experts in ACO technology, however a basic
understanding of system IT requirements arms radiologists for success and can
lead to more meaningful negotiations.

Radiology and the Accountable Care Organization

Reimbursement Under an ACO

The spectrum of reimbursement options available to radiologists under an ACO
will continue to evolve, however currently most systems participating in ACOs
have negotiated FFS payments to their radiologist groups.
Radiologists may be exposed to bundled payments whereby they are paid a
single payment for a single episode of care for an individual patient. Under this
arrangement, the patient may receive several imaging exams during their single
episode of care and the radiology group accepts the associated risk and cost.
It is possible that radiologists will be included in shared savings programs
whereby they receive a portion of savings as part of the ACOs ability to reduce
expenditure in one-sided shared savings programs or are exposed to both the
savings but also the risk of costs in two-sided shared savings programs.

Non-Exclusive ACOs
Related to geographic coverage requirements, a single ACO may desire more
than one radiology group. In such circumstances it is incumbent upon the
disparate groups to develop an alignment enabling them to function as a
cohesive group within the ACO. Being proactive in this regard in anticipation
of an ACO will be advantageous.

Determining Radiologys Value

Unquantified value is
unmarketable value

Appropriate alignment in an ACO allows radiologists to better demonstrate

their true value to the healthcare enterprise. Historically many radiologists have
defined their value by good enough quality based on the number of misses
combined with their RVU volume. As reimbursements continue to decline,
ACOs may be an opportunity for radiologists to mitigate these changes. ACOs
however are not a free ride for radiology. In order to receive satisfactory
compensation, radiologists will need to prove their value beyond RVUs and a
written report. Some of this proof will be provided through improved tracking
and reporting of outcomes. Some will be through the development of quality
programs. The majority however, will be through changes in the culture of the
radiology group and the role of the radiologist in the healthcare enterprise.
Radiologists need to be visible, they need to market themselves, they need to
consult as often as possible with both referrers and patients and spend time
making administration familiar with their skills and value proposition through
metrics wherever possible. Unquantified value is unmarketable value.

Radiologists Evolving Role

In the past, radiologists held unique relationships with their referrers that
involved in-depth consultations. Over time, market conditions led us to a
productivity focus, enabled by technology.
Radiologists now may be perceived more as a commodity, as fungible report
generators.

Radiology and the Accountable Care Organization

The radiologists focus needs to change from volume to value. [6] The
interpretation of the image, the report, is only a piece of the radiologists
contribution and responsibility. The radiologist may play an important role as
triager for primary care providers as well as specialists. A role in clinical decision
support and appropriate utilization will certainly be of value. Rapid, accurate
diagnosis and actionable reports drives efficiency of the entire enterprise. In
the ACO environment, the radiologist will have improved access to patient
information and can bring a much deeper level of connection between clinical
and radiological findings.
Radiologists must also become co-managers of the entire imaging enterprise,
working with the ACO and hospital system to strategize, be accountable for
operational and quality outcomes, educate referrers, and manage department
resources. Importantly, radiologists need to emphasize their consulting role to
truly maximize their value to patients and referrers. [2]
ACOs can be led by hospitals, insurers or physicians. We believe the most
successful ACOs will be led by physicians as they are in the best position to
be the central integrators in the ACO alignment model. They understand best
the risks and opportunities in healthcare and they can develop the toolkits to
manage them real-time. Acute care delivery will still center around hospitals
however, much of the cost saving will occur in the outpatient setting under
the guidance of primary care physicians working with radiologists and other
physician colleagues and extenders.
As part of the shift from reactive to proactive medicine, an increase in screening
exams will likely occur under an ACO model of which radiology will be an
integral component.

Summary: Preparing Radiologists for an ACO

1. Understand the billing and collections data for your practice.
a. Being familiar with volume and revenue data by payer group
will be helpful in future contracting discussions.
b. Segmenting your data will help you identify groups of patients
where the practice may benefit from some form of risk/
capitation arrangement.
2. Understand your outpatient reach.
a. In order to achieve the required geographic footprint, ACOs
are often not exclusive to a single radiology group.
b. Building relationships with other groups in your area that can
help you achieve both the culture and reach, will reduce the
risk that the ACO will choose your radiology partners for you.
3. Have access to decision support tools.
a. Insurance providers supply algorithms that can be loaded into
Computerized Physician Order Entry (CPOE) systems.
b. Providing access to CPOE for outpatient providers can help
reduce leakage and improve convenience for those providers.

Radiology and the Accountable Care Organization

4. Provide referrer education.

a. Aimed at appropriate utilization.
b. May include outlining benefits of screening programs that
lead to reduced downstream costs.
5. Have access to a Health Information Exchange (HIE).
a. Having access to prior studies improves report outcomes and
reduces repeat imaging.
6. Provide improved consult access.
a. Establish a direct line of communication to radiologists to
improve peer-to-peer relationships, assist with appropriate
utilization and prevent leakage.
b. Radiologist participation in a system-wide patient portal.
7. Develop quality program.
a. Radiologists will be required to demonstrate meaningful
and measurable quality initiatives to payers and referring
physicians.
b. Objective quality measures should be supplemented with
subjective quality measures such as satisfaction surveys.
8. Begin process to standardize best practices between facilities within
the ACO network.
9. Consider utilizing physician extenders.
a. Nurse practitioners and physician assistants can allow
radiologists the time to provide more value-added services.
10. Be proactive.
11. Assume a leadership role.

Radiology and the Accountable Care Organization

References
[1] M. Gamble and H. Punke, ACO Manifesto: 50 Things to Know
About Accountable Care Organizations, 03 September 2013. [Online].
Available:
http://www.beckershospitalreview.com/accountable-careorganizations/aco-manifesto-50-things-to-know-about-accountablecare-organizations.html.
[2] R. Abramson, P. Berger and M. Brant-Zawadski, Accountable Care
Organizations and Radiology: Threat or Opportunity?, Journal of the
American College of Radiology, vol. 9, no. 12, pp. 900-906, 2012
[3] N. Bauman, M. Chopra, J. Cordina, J. Meyer and S. Sutaria, Winning
Strategies for Participation in Narrow-Network Exchange Offerings, May
2013. [Online]. Available: http://healthcare.mckinsey.com.downloads/
MCK_Hosp_ExchangeStrategy.pdf.
[4] T. OBrien, Making the Most of Electronic Medical Records
Through Time-Driven, Activity-Based Costing, 14 October 2013.
[Online]. Available: http://www.beckershospitalreview.com/healthcareinformation-technology/making-the-most-of-electronic-medicalrecords-through-time-driven-activity-based-costing.html.
[5] D. Sanders, Accountable Care Organization Software: 5 Critical
Information Systems, 26 July 2013. [Online]. Available http://www.
healthcatalyst.com/information-systems-for-accountable-careorganizations.
[6] American College of Radiology, Imaging 3.0 Overview, [Online].
Available:
http://www.acr.org/~/media/ACR/Documents/PDF/
Economics/Imaging3/Imaging3.pdf.

Radiology and the Accountable Care Organization

Appendix A: CMS ACO Program

For CMS driven ACO programs, there are two program types. [1]
1. Pioneer ACO Model
a. Participants share in the savings and losses
b. This program has a higher risk level than Medicare Shared
Savings Program (MSSP) and can achieve shared savings in
the first two years under the shared savings and losses model.
There is no option for a shared savings only arrangement for
the pioneer program.
c. Pioneer ACOs can move from fee-for-service to populationbased payment in year three, which is a per-member-permonth payment designed to replace most or all of the ACOs FFS
payment. They must also negotiate outcomes-based contracts
with other payers by the end of the second performance year
(which is most likely driving the commercial ACOs).
2. Medicare Shared Savings Program (MSSP); which has two tracks
a. Track 1: ACOs that achieve a specified minimum amount of
savings can share in up to 50 percent of the savings with CMS.
Track 1 ACOs do not take on downside risk for the three-year
period.
b. Track 2: ACOs that achieve a specified minimum savings can
share in up to 60 percent of the savings. If Track 2 ACOs do not
meet the specified savings benchmark, they are liable for up to
60 percent of the difference between the benchmark and the
actual expenditures for the performance year
c. For the first performance year in the MSSP, ACOs are paid for
reporting on 33 quality measures. Known as pay-for-reporting
d. In year two, more reimbursement is tied to the ACOs
performance. Pay-for-performance applies to 25 of the quality
measures, and pay-for-reporting applies to eight (7, 8, 19, 20,
21, 31, 32, 33)
e. In year three, 32 quality measures are pay-for-performance,
and #7 is the only pay-for-reporting measure
f. The advanced payment model falls under the MSSP and
is meant to help small organizations that have less access to
capital participate in the shared savings program. Recipients of
the advanced payment model receive three types of payments:
Upfront, fixed payment; upfront variable payment based on
the number of historically assigned beneficiaries; or a monthly
payment based on the number of beneficiaries.
The quality measures can be accessed through the CMS website, however only
one relates directly to radiology; breast cancer screening with mammography.
In essence, economic incentives are used to control costs while still allowing
flexibility to payment structures and risk allocation between payers and
providers. [2]
Radiology and the Accountable Care Organization