Since the Patient Protection and Affordable Care Act passed in 2010, we have received a number of questions from members of our community about a new aspect of that law: the Accountable Care Organization (ACO). We wanted to take time to share with you what is myth and what is reality when it comes to OneCare Vermont, an ACO serving many of Vermont’s Medicare beneficiaries.
What is an Accountable Care Organization, anyway?
An ACO is a group of health care providers who agree to share responsibility for the quality and cost of care for a specific group of patients, with the goal of improving their overall health. If providers in an ACO are successful, they may share in possible savings generated from providing better-coordinated, high-quality care to their patients. ACOs create patient-focused working relationships among the participating clinicians. At their core, accountable care organizations are voluntary, provider-led collaborations in service to their local populations.
What is OneCare Vermont?
OneCare Vermont is Vermont’s statewide ACO – presently, it may be the nation’s only statewide ACO. It includes OneCare Vermont’s founders the UVM Medical Center and Dartmouth Hitchcock of New Hampshire, all 14 of Vermont’s hospitals, hundreds of primary care physicians and specialists, two federally qualified health centers, and several rural health clinics. The participants in this network have agreed to work together to care for about 43,000 of Vermont’s approximately 118,000 Medicare beneficiaries. In the coming months, we plan to bring in the expertise of home health, hospice and other community-based providers to realize even more opportunities for collaboratively improving health care.
Is OneCare Vermont a for-profit company? Is it an insurance company?
There is still a bit of “mythology” to address about OneCare Vermont. For example, our ACO is not an insurance company. ACOs do not pay doctors or hospitals. These providers directly bill and are paid by Medicare for the services they provide.
We should also clarify the “for profit” status of OneCare Vermont. Our ACO was formed as a limited liability company (LLC). The LLC structure was selected because it meets regulatory requirements established for ACOs by Medicare, which includes that the governing board be at least 75% controlled by participants with a financial interest in the ACO, where Vermont’s nonprofit corporation laws require a different, conflicting governance structure. As a result, OneCare Vermont could not be formed as a Vermont nonprofit corporation.
However, because it is owned by two non-profit 501(c)(3) tax-exempt organizations – the UVM Medical Center and Dartmouth-Hitchcock – OneCare Vermont is essentially non-profit. The OneCare Vermont LLC is not designed to generate a surplus or “make a profit”. Any incentives earned from Medicare for quality performance will be distributed back out to OneCare Vermont doctors and hospitals to support their patient care missions. In fact, there is no assurance that any money will flow into or through our ACO if we do not demonstrate improvements in quality and cost-effectiveness. As founders of OneCare Vermont, the UVM Medical Center and Dartmouth-Hitchcock do not expect to ever fully recover the upfront investments required to bring the benefits of OneCare Vermont to Vermont’s Medicare beneficiaries.
Further, OneCare Vermont has no other investors or outside financial stakeholders – an odd business model, yes; but an important opportunity to help make Vermont’s strong health care system stronger and reward the providers who are successful in delivering the kind of healthcare we all envision.
In our next blog post, we will introduce you to the players who make up OneCare Vermont.
Todd Moore is CEO of OneCare Vermont and Senior Vice President for Accountable Care at the UVM Medical Center. Church Hindes is Vice President for Accountable Care at the UVM Medical Center.