Radiology’s ACO Play: Get in the Game—Now

The ACO, a relatively new concept that met with great skepticism when it appeared in the Patient Protection and Affordable Care Act, now ranks at the top of the conversation-starter list in the radiology community. Imaging providers have debated whether it is necessary for them to engage with these entities, and, if they do, what roles they would play. The current consensus not only is that radiology cannot afford to ignore the ACO model, but also that a strategic approach must be followed if providers are to assume their positions successfully under the ACO umbrella. Some (if not many) radiologists have made no immediate attempt to procure a seat at the ACO table, instead adopting a wait-and-see attitude or ignoring the issue entirely. Such procrastination is shortsighted at best, according to W. Kenneth Davis Jr, JD, partner with Katten Muchin Rosenman LLP. He says that providers who envision themselves joining Medicare ACOs must bear in mind that unless they take action now, they might find themselves with little decision-making power later. His rationale: Medicare ACOs are required to sign a three-year contract with Medicare; during this initial period, they can terminate participants, but cannot bring aboard any additional ones, be they operators, founders, or owners. It’s just as significant that while ACOs in this category can add providers and suppliers on a contract basis (within the first 36 months in which an agreement is in force), contract players cannot be assigned governance roles within the organization. “This, in itself, should be impetus to move today—not tomorrow,” he says. Despite the widely acknowledged fact that ACOs—Medicare and otherwise—are in the formative stages of development and have not hit their stride, radiologists’ chance to forge appropriate ACO alliances with the highest potential for long-term success is greater today than it will be in the not-too-distant future. Bibb Allen Jr, MD, FACR, serves as a diagnostic radiologist in the Birmingham Radiological Group in Alabama and as vice chair of the ACR^® Commission on Economics. He is also the lead author of an ACR white paper¹ on the subject. In the white paper, Allen et al point out that ACOs might cultivate partnerships with multiple radiology groups, entertain proposals from radiology groups based at different hospitals, and/or consider using the services of outside teleradiology companies to satisfy their imaging-services needs. As a guarantee of future ACO affiliation, “complacency and reliance on existing provider contracts at participating hospitals are not options,” Allen says. The longer the delay in attempting to sit down at that ACO table, he adds, the smaller the number of remaining tables from which to choose. Making the Transition For radiology, gaining entry into the ACO arena and becoming a key player in the delivery of care through an ACO model are heavily predicated on a willingness and ability to offer significant added value in the management of population health. Assuming a utilization-management role that involves the assessment of imaging appropriateness and advocacy for the safest, most accurate diagnostic tests—no matter the payment methodology—is key. Chip Hardesty serves as COO of Radiology Ltd (Tucson, Arizona), which—in addition to outpatient services—provides imaging for Tucson Medical Center. The facility, along with two other independent physician groups, was one of five Brookings–Dartmouth ACO pilot sites. Hardesty notes, “ACOs are all about sharing and reducing costs without compromising the quality of care. Radiologists—who know better than other physicians which tests are best suited to which cases and when it is prudent to opt for (or against) a certain test—are in a perfect position to go beyond interpretations and act as utilization-management resources. What’s more, while it may be fairly easy for ACOs to outsource image interpretation, utilization management is much tougher to outsource, making it a very valuable way to add value.” In assessing imaging appropriateness, overseeing utilization, and administering imaging programs, Hardesty says, it behooves radiologists to use such IT tools as computerized provider order entry (CPOE) with decision support. In weighing in on imaging appropriateness and executing other tasks related to utilization management, however, radiologists must present feedback that is not limited to findings derived from CPOE with decision support and similar technologies, but also is based on their expertise. “If utilization management appears to ACOs as the sole product of software tools, utilization management could become commoditized—just as imaging interpretation has been, in many communities,” Hardesty says. Reclaiming the Consultative Role The added value to be afforded to ACOs by radiology also comes in consultative form. James T. Whitfill, MD, is CMIO at Southwest Diagnostic Imaging Ltd (Phoenix, Arizona) and is founder and president of Lumetis, LLC, a company that delivers IT solutions, guidance, and operational services intended to facilitate the transitions of hospitals and health plans to high-performing accountable-delivery systems. Until about 15 years ago, Whitfill says, radiologists routinely harnessed their extensive knowledge of disease and clinical states in serving as true consultants to specialists in other fields. Such catalysts as the advent of PACS, however, spurred them to cede those roles, which must now be reclaimed if ACOs are to regard radiology as something other than a commodity. Whitfill notes that on the consultative side, the true value of radiology transcends the production of text-based reports at the fastest speed and the lowest cost. It expands to encompass partnerships wherein radiologists and specialists coordinate patient care and services on multiple levels and strive to vet each others’ approaches. When the consultative piece is part of the value pie, ACOs could regard radiology in an entirely new and more positive light, Whitfill observes. In a similar way, the ACR holds that radiologists can proffer value via collaboration with primary-care providers. In the white paper, Allen et al report that input from radiology is effective in solving a large percentage of clinical problems seen in an ACO setting—without the need for referral to a specialist. They cite the example of a patient who sees his primary-care physician for recent-onset chest pain. The physician suspects coronary-artery disease, but is also concerned about other conditions (including pulmonary embolism, aortic dissection, pericarditis, and penetrating atherosclerotic ulcer of the aorta). Instead of being referred to a cardiologist for a lengthy, expensive work-up, the individual is sent to a radiologist, who performs one study (in this instance, triple–rule-out CT angiography). In a majority of cases, this either establishes a diagnosis or confirms the absence of a significant problem. Only if significant cardiac disease is revealed is the patient referred to an appropriate specialist for treatment. Assistance with IT constitutes another element of added value. Radiology’s “long history of doing innovative things with technology,” Whitfill says, “long before other specialties got started”—as exemplified by its advances in digitizing images and reports—places imaging providers in the perfect position to proffer added value on the IT front. “There is tremendous need for such skill in the ACO model,” Whitfill states. The IT piece must be an integral component of value that includes not only input into the technologies that should be implemented by the ACO in question, but also the administration of CPOE as its decision-support hub, the active management of the ACO’s IT infrastructure, and (perhaps even more important) support for the exchange of information across a wide variety of integrated platforms and sites. Debunking Myths There also are myths to be debunked, the most prevalent being that radiology is more of a cost center than a revenue producer. Presenting ACO organizers with a comparison of costs incurred and benefits achieved, using industry benchmarks, is critical. Although some have argued that there exists no place for outpatient imaging centers within the ACO model, quite the opposite is true. As Davis and Allen point out, such facilities (arguably) cost less to operate than do their hospital-based counterparts; by affording easy access to imaging services at conveniently situated locations, they also enhance the overall health-care experience for ACO patients. When outpatient imaging centers are a component of an ACO, member hospitals shoulder a lighter imaging-services burden and can devote the bulk of their efforts to handling, in a timely manner, the imaging needs of inpatients and those seen in the emergency department. Imaging centers, however, cannot assume that these benefits are sufficient to win over ACOs. Rather, it is incumbent upon them to sharpen their persuasive edge by demonstrating additional value through participation in accreditation, utilization-management, and radiation-safety programs, as well as by becoming multimodality centers and by documenting the absence of any financial conflict of interest for an ACO affiliation. Don’t assume that a given potential alliance with one ACO will prove as viable as a given potential alliance with another ACO, in either the shorter or the longer term. Conversely, Davis says, no matter how attractive the value proposition offered by a radiology entity is—at least, from the perspective of its own management—it might not be the right fit for every ACO prospect. The proposition of value for the ACO itself, for the patient population, and for the payors does not always mesh with the objectives and needs of a particular ACO; a lack of alignment will only lead to headaches down the road. For this reason, Davis entreats practice leaders to conduct a comparison of their groups’ value propositions with the goals and objectives of prospective partners, prior to moving forward with any ACO agreement. Michael A. Silver, PhD, vice president of Sg2, a health-care–intelligence company, concurs, adding that it is important for radiology providers to ask themselves many questions, instead of blindly attempting to shoehorn themselves into an alliance that might not be an appropriate one. “For example, does the group have sufficient physician resources and management expertise?” Silver asks. “Do the other physicians seem to have a passion for weighing cost and quality issues over time? Are electronic medical record and performance data reviewed and acted upon, and does there appear to be a willingness to adhere to patient-care and -safety guidelines? Just because a particular ACO is forming and available doesn’t mean you want to join it.” Silver adds that radiologists should also disabuse themselves of the notion that they can, or should, attempt to circumvent compatibility and other issues by forming their own ACOs. “It’s not going to happen,” he says. “The federal CMS ACOs are all about primary care, by law. Commercial payors are a bit more flexible, but not that much; they won’t go for radiologists driving primary care.” Preparing for the Challenges While the importance of adding value to the equation should not be underestimated, the degree to which radiologists understand and plan for the risks inherent in the ACO model also has a bearing on their success. Radiologists working in an ACO setting will undoubtedly see reduced revenues from interpretations, based on the shift away from volume-based compensation and toward reimbursement that values quality and appropriateness. To compensate, they will need to garner reimbursement for nonclinical activities such as utilization management, enterprise administration, quality control, technologist supervision, equipment selection/optimization, and the education of colleagues outside the radiology realm. “The prevailing sentiment should be that risk sharing is acceptable; we’d be happy to take the risk—but if you put us at risk, you have to give us the authority to manage it and compensate us accordingly,” Davis states. Allen adds, “Radiologists need to forge arrangements with ACOs under which they receive a share of revenues to compensate them for managerial and administrative functions. It’s best to do this with shared risk or shared savings, depending on whether set targets are met.” In certain instances, he adds, ACOs might attempt to compel radiologists to participate in capitation arrangements. To avoid difficulties, he advises, providers should ensure that the capitated payments that they receive are based on past fee schedules and have built-in risk corridors. Moreover, smaller imaging groups might find that ACOs do not generate the bulk of their business—and that they do not have as much negotiating power with ACOs as their larger counterparts have. Consolidation or integration with larger groups appears to be a panacea for ills of this type. “Among the most important things to remember is that ACOs are still in the training-wheels stage,” Silver concludes. “Like others, this model is evolving, and radiology will need to evolve with it.”

Julie Ritzer Ross is a contributing writer for Radiology Business Journal