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Physician Owned ACOs
The Medicare Shared Savings Plan (MSSP), created under the Affordable Care Act, allows physicians to self-manage their Medicare patients under a new program model called an Accountable Care Organization (ACO). The MSSP also allows for waivers of anti-trust laws and Stark regulations, allowing physician ownership of the ACO networks. 
  • ACO’s are a healthcare organization utilizing a payment and care delivery model that theoretically ties provider reimbursements to quality metrics and reductions in the total cost of care for a set population of patients. 
  • ACOs make providers jointly accountable for the health of their patients, giving them financial incentives to cooperate and save money by avoiding unnecessary tests and procedures. Providers share in savings achieved through quality, financially responsible, coordinated care.
  • The ACO may use a range of payment models (capitation, fee-for-service with asymmetric or symmetric shared savings, etc.). 
  • A group of healthcare providers form an ACO, which then provides coordinated care to a group of patients. For example:
- A large primary care practice 
- A multi-specialty group  
- A fully integrated delivery system, including doctors and facilities 
- A Physician Hospital Organization 
- An Independent Physician Association/Independent Practice Association 
The LSMS is following Dr. Joshua Lowentritt of New Orleans through the process of establishing his ACO. Read more about his venture in the Journal of the LSMS
  • About 4 million Medicare beneficiaries are now in an ACO, and, combined with the private sector, more than 428 hospitals have already signed up. An estimated 14% of the U.S. population is now being served by an ACO. – Kaiser Health Foundation (KHF)
  • HHS estimates that ACOs could save Medicare up to $940 million in the first four years. - KHF
  • ACOs sponsored by physicians or rural providers, can apply to receive payments in advance to help them build the infrastructure necessary for coordinated care. - KHF
  • The only must-have element in an ACO is primary care physicians, who serve as the linchpin of the program.  More than half of the current Medicare ACOs are actually run by physicians and don’t even include a hospital partner.- KHF
Definition & Legal Requirements 

An Accountable Care Organization is defined in New Section 1899 of Title XVIII of Affordable Care Act as: 
  • An organization seeking to operate under the umbrella model of an ACO is required to: 
  1. Have a formal legal structure to receive and distribute shared savings
  2. Have a sufficient number of primary care professionals for the number of assigned beneficiaries (to be 5,000 at a minimum)
  3. Agree to participate in the program for not less than a three-year period
  4. Have sufficient information regarding participating ACO healthcare professionals as the Secretary determines necessary to support beneficiary assignment and for the determination of payments for shared savings.
  5. Have a leadership and management structure that includes clinical and administrative systems
  6. Have defined processes to (a) promote evidenced-based medicine, (b) report the necessary data to evaluate quality and cost measures (this could incorporate requirements of other programs, such as the Physician Quality Reporting Initiative (PQRI), Electronic Prescribing (eRx), and Electronic Health Records (EHR), and (c) coordinate care
  7. Demonstrate it meets patient-centeredness criteria, as determined by the Secretary.

Additional Information
Centers for Medicaid & Medicare Services - Information on ACOs
American Medical Association - Information on ACOs


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Louisiana State Medical Society

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Baton Rouge, LA 70808

Ph: 800.375.9508 | 225.763.8500
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