The Business of Health Care

So, You’re a Next Generation ACO …

Screen Shot 2016-01-14 at 5.45.59 PMCMS recently announced the inaugural class of Next Generation ACOs – the latest accountable care models which includes higher levels of financial risk and greater opportunity for reward than have been available within the Pioneer Model and Shared Savings Program. CMSs goal is to test whether these greater financial incentives, coupled with tools to support better patient engagement and care management, will improve health outcomes and lower costs for Medicare fee-for-service (FFS) beneficiaries.
One of the most exciting opportunities for these ACOs is the ability to leverage telehealth above and beyond what is currently permissible in fee-for-service Medicare.

Since section 1834(m) of the Social Security Act was codified well over a decade ago, telehealth has only been able to serve Medicare recipients when they got in their cars and drove to a clinical site, in a rural area of the nation. Simply translated – no homes or cities count. With the lightning speed of telehealth advancement, this structure is archaic, limiting, and frankly at this point, senseless. Now, with this Next Gen designation, these “Next Gens” will be able to offer care through telehealth technologies regardless of the patient’s location.

So, why should each and every one of these ACOs in this premier class leverage telehealth as a part of their model? For them, the answer is engagement and revenue. For the rest of us – it’s proof.
The more patients are engaged in their healthcare, the more successful an ACO will be. Telehealth offers the ability to offer on-demand availability, project care after hours, reduce travel time and expenses, and allows providers to quickly identify and address gaps in care. Combined with the high satisfaction rates telehealth has produced for its end users, Next Generation ACOs have before them a tool that will improve their ability to manage and empower their patients, and improve outcomes through greater touch points.

Then, of course, there’s the dollars. As ACOs make money by keeping the greatest number of patients healthy, telehealth is a key tool in driving revenue. The “anytime, anywhere” nature of telehealth allows ACOs to effectively compete with the rise of retail health clinics and increase covered lives by offering urgent care services 24/7. These technologies can also address increasingly overextended physician supply through load balancing and expand providers’ geographic reach.

The value of telehealth to the freshman class of Next Generation ACOs is undeniable, but these innovators have an ever greater role to play. They can lay the groundwork for the rest of the Medicare ecosystem. For years, telehealth advocates have been championing the cause of expanding telehealth reimbursement within fee-for-service Medicare. And for as many years, the pushback from decision makers has been the unfounded belief that increasing access to telehealth will result in increased costs. Despite concrete proof in the commercial environment that each telehealth encounter saves money, the lack of data from within the Medicare population has resulted in an impasse. These Next Gens have the ability to create the very proof telehealth champions have been waiting for – concrete evidence of the value of telehealth for Medicare enrollees, regardless of who or where they are.

Kofi Jones is a telehealth policy expert for American Well.

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prestamos rojosjcpinacreditosStephanie Ip HunterWilliam Palmer MD Recent comment authors
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prestamos rojos

Well explained article! Thank you for that 🙂


According to the Centers for Medicare and Medicaid Services, healthcare accounts for 17.8% of the U.S. GDP. (CMMS, 2016) Given the rising costs of healthcare, nationwide discourse surrounding this problem remains controversial. Conversations at all levels, whether political, economic, or societal are centered on “fault.” Who is responsible for these soaring prices: Physicians? Insurance companies? Or is it administrative bureaucracy? In short, the lack of coordination between these levels of care is one way to evaluate the issue at hand. As a means to mediate the fragmented healthcare system, there is a push for healthcare to integrate an Accountable Care… Read more »


Nice Article!!!!

Stephanie Ip Hunter

I really believe that your article highlights two key points outside of the financial incentive drivers: 1) the more engaged patients are, the more successful the ACO will be–making the connecting two way rather than just pushing information. 2) the Nex Gen of ACO and the fact that there is going to be an evolution from today.

Good news that nothing is static and the thought that telemedicine will be used in conjunction with what there is today, improvement is underway!

William Palmer MD
William Palmer MD

I wonder how much–what percentage–of the total PCP job we can do without touching, percussing and auscultating the patient?

Is telehealth presently set up so that the doc has an docent/assistant at the patient’s side who can do these things and see that their results are adequatly sent to the doc?


Is it even possible to transmit some of these data? Eg. feeling the thickness of a suspicious nevus is important. Do you think this can be done through telehealth techniques? Telling a benign lipoma from a more ominous neoplasm might be impossible without actually doing it yourself.