Second Payment Reform Report: Accountable Care Organizations –
Suggested Guidelines for Implementation in Massachusetts

The Massachusetts Hospital Association (MHA) released "Creating Accountable Care Organizations in Massachusetts: Key Issues for the Commonwealth to Address" on Friday, November 20, 2009. The publication is the second report in a six-part series on Massachusetts healthcare payment reform.

The new report outlines goals and recommends strategies the state can adopt to facilitate successful formation and operation of ACOs. Last July, the Massachusetts Special Commission on the Healthcare Payment System issued broad and wide-ranging recommendations on how to improve the way healthcare is provided and paid for in the Commonwealth, including the formation of ACOs to foster more efficient and coordinated care delivery. According to the Special Commission, ACOs will be vital to the transition from the state’s current fee for service payment model to "global payments,” which would cover most, if not all, health care for a large group of beneficiaries.   

“The Massachusetts Hospital Association is proud to be taking a leadership role in moving the state’s healthcare reform efforts forward,” said Lynn Nicholas, FACHE, MHA’s President & CEO. “This latest report provides concrete ideas for our state government leaders and policymakers to consider as they work to  create and build successful ACOs in the Bay State.”
MHA’s strategic recommendations for ACOs include:

• Providing adequate and appropriate payment for services
• Aligning payment methods across payers
• Ensuring appropriate and efficient quality measurement
• Facilitating the formation of successful Accountable Care Organizations
• Addressing key transition issues

“A shift to ACOs could result in major improvements in care delivery and efficiency across the commonwealth,” Nicholas continued. “But just changing the model without careful and thoughtful planning would threaten the entire reform process. Massachusetts hospitals care for our residents when they need it most, and they also drive 15 percent of the state’s economy. The consequences of poor execution are enormous. These changes deserve to be done right, and we believe that Massachusetts policy makers and stakeholders are committed to taking the time and to working collaboratively so that reform is successful.”

The first part of the MHA series – "Massachusetts Payment Reform: An Overview of Critical Foundational Issues" – provided an overview of the main issues the in-depth MHA reports will cover: ACOs, the transfer of risk to providers, benefit design, oversight requirements, and how a new payment system will affect societal needs, such as medical education, uncompensated care and behavioral health.