Last week I attended the Accountable Care and Health IT Summit in Chicago focused on Accountable Care Organizations (ACOs). The general belief that CMS’ MACRA and MIPS payment models are changing too fast for health organizations to adapt was common. And while there are great examples of companies using data and telehealth to impact population health and new technologies and patient processes that are both improving outcomes and costs, everyone is really figuring it out as they go.

A key issue is that of reimbursement. As ACOs coordinate and/or buy up physician practices, the missing piece is making sure they understand how to negotiate reimbursements with the payers, including private payers. As ACOs step into the role of ‘payvider’, as it’s been coined, a level of sophistication around contracting and risk analysis is required.

Private payers focus on commercial populations within their portfolio versus the general population health. Their populations can also come and go as companies move their health plans to other payers, which increases their investment risk.  Understanding where ACO and payers can come together to effectively delivery care at a lower price point is key to managing an effective ACO, for example: Medicare Advantage’s higher PMPM cost and disease burden could present an opportunity for a savvy ACO in this market.

Bottom line is that to optimize revenue opportunities ACOs need to have payer insight, contract negotiating skills, an understanding of federal legislation, and risk/reward analysis skills on their team when negotiating reimbursement contracts with payers.  Doing so will help ACOs better leverage their investments and reach the benchmarks of both the federal government and private payers.