Accountable Care Organizations: Implications for Oncologists

Rhonda Greenapple, MSPH

June 2011, Vol 2, No 3 - Health Policy

President and Founder, Reimbursement Intelligence, Madison, NJ

The journey for healthcare costsavings is a never-ending process. One of the newest healthcare delivery models, which is mandated for Medicare beneficiaries in the healthcare reform law, is the accountable care organization (ACO). This new model requires ACOs to focus on primary care, but it has implications for oncologists as well.

Oncologists Can Join, Not Start, an ACO
An ACO is a network of providers that agrees to manage all of the healthcare needs for a defined population in a specific period—at least 5000 primary care Medicare patients for at least 3 years. In effect, an ACO is an integrated system that attempts to eliminate fragmented care for Medicare beneficiaries and coordinate their entire care—prevention, diagnosis and treatment, and the continuing management of chronic diseases, as well as aftercare.

The ACO requires providers to manage all the health needs of their covered populations. The cost-saving is expected to come from eliminating unnecessary or redundant procedures, sharing clinical information among providers, and meeting quality targets that allow providers to keep a portion of the savings. Providers will be paid more for keeping their Medicare patients healthy and out of the hospital.

Under this new model, providers must collect and report utilization and cost data to the Centers for Medicare and Medicaid Servcies and for their ACO population, as well as on measures of quality of care and population health. A provider may be required to meet minimum quality standards to continue to participate in an ACO.

The law allows any number of organizations to form an ACO, including physician group practices, practice networks, hospitals, hospital–physician systems, and other groups.

Oncologists, like other specialists, cannot take the lead in launching and managing an ACO, but they can join as many ACOs as they wish.

Few Quality Measures for Cancer Care
Of the 65 proposed quality measures outlined in the ACO law, only the preventive measures of screening for colon cancer and mammography relate specifically to cancer care. Patrick Cobb, MD, Chairman of Community Oncology Alliance (COA) and the COA Policy Committee, and Ted Okon, Executive Director of COA, outlined the challenges for oncologists in a recent article on

According to Dr Cobb and Mr Okon, “An oncology provider participating in an ACO will be under enormous pressure to simply control or reduce costs. Supporters argue that ACOs are different from HMOs, in part because they are not just about cost-savings—quality measures must be satisfied. However, there are no quality measures for cancer treatment. Furthermore, although there is a nod to quality, no one should kid themselves—ACOs are really all about saving money.”1

They cite the following hypothetical example: “What happens when a new $93,000 prostate vaccine or $120,000 melanoma drug becomes available? These expensive new therapies will threaten to break the ACO bank, putting the pressure squarely on the oncologist to either keep the patient’s best interest or that of the ACO as highest priority. Few oncologists will want to be placed in that position.”1

Overlook Medical Center in Summit,NJ (part of AtlanticHealth), is in the process of creating 2 ACOs. In a phone interview in May 2011, Overlook’s president, Alan Lieber, pointed out, “The potential savings in clinical oncology will be driven by the design of incentive structures. The more oncologists are allowed to provide cost-effective care, themore likely they will be to participate.”

Cost versus Quality in Oncology
An ACO management will have to address the delivery, measurement, and cost of quality of cancer care. The issue of quality versus cost may result in clinical dilemmas between primary care physicians and oncologists. For example, for a cost-conscious primary care physician, the high cost of cancer surgery could function as a disincentive to refer a patient to a surgeon. The physician could instead suggest a less expensive course of chemotherapy.

Dr Cobb and Mr Okon summarized it best; “The burning question is ‘who’ oncologists are accountable to—payers (in finding cost-savings), or their patients (in providing quality cancer care)? Certainly, at a time when cancer incidence and treatment costs are both increasing, oncologists bear some responsibility for controlling costs. The strategies for doing so include providing care, for example, that minimizes emergency room visits and hospitalizations and using evidence-based guidelines to control treatment costs, when possible. However, first and foremost, oncologists are accountable to their patients in providing the highest quality cancer care.”1

The jury on ACOs will be out for a long time. ACOs must prove that they enhance overall healthcare quality, while also reducing costs.As for oncologists, theymust become familiar with ACO rules and regulations to determine the best way they can contribute in such a model.


  1. Cobb P, Okon T. Just ‘who’ is the oncologist accountable to in an accountable care organization? September 7, 2010. Accessed May 31, 2011.