Accountable Care Organizations and Surgical Quality Metrics: Compliance for Participating Practices
Accountable care organizations (ACOs) are groups of healthcare providers who voluntarily coordinate care for Medicare beneficiaries with the goal of delivering high-quality care at lower total cost. The Medicare Shared Savings Program (MSSP), administered by CMS, is the primary ACO framework for traditional Medicare. Surgical practices that participate in ACOs through employment, formal participation agreements, or shared savings arrangements take on quality reporting and care coordination obligations beyond those of standard fee-for-service practice. Surgical episodes, including both procedures and the 30 to 90 day post-discharge period, are among the highest-cost components of Medicare ACO spending benchmarks, and readmission rates following surgical procedures are a primary quality metric in MSSP reporting. This guide covers how MSSP ACOs attribute surgical quality and readmissions, what documentation surgical practices need to support ACO quality reporting, and what post-discharge care coordination obligations apply within ACO participation agreements.
How ACOs Measure Surgical Quality and Readmission Performance
MSSP ACO quality reporting uses a set of measures drawn from the CMS Merit-based Incentive Payment System (MIPS) quality measure library and additional ACO-specific measures. Surgical performance within an MSSP ACO is measured primarily through composite outcomes: all-cause readmission within 30 days of discharge, patient experience scores, and preventive care process measures. CMS calculates ACO readmission rates at the ACO level rather than at the individual surgeon level, but high-volume surgical specialties within an ACO have a disproportionate influence on the ACO's total readmission performance because surgical discharges generate higher-acuity admissions than most primary care encounters.
Attribution of Medicare beneficiaries to an MSSP ACO is based on the plurality of primary care visits, not on specialty care visits. A patient who sees a surgeon for an orthopedic procedure but whose plurality of Medicare primary care visits are with a primary care physician in the ACO will be attributed to that ACO. This means surgical practices whose patients are attributed to an ACO that the surgical practice participates in have their surgical outcomes included in the ACO's quality benchmarks, even when the surgical practice did not generate the attribution. Surgical practices participating in ACOs should confirm with their ACO's administrative team which beneficiaries attributed to the ACO are patients of the surgical practice, so that the practice understands which post-discharge interactions affect the ACO's performance metrics.
CMS uses claims-based readmission measures to calculate ACO readmission performance. The 30-day all-cause readmission rate is calculated using Medicare claims data without requiring submission of clinical quality data by the participating provider. This means that a surgical practice's contribution to ACO readmission performance is captured automatically through billing data, regardless of whether the practice submits any quality documentation to the ACO. However, ACOs that participate in certain MSSP tracks have the ability to submit supplemental clinical data to CMS that can risk-adjust the readmission measure for patient complexity, which requires clinical documentation that accurately reflects patient comorbidities and risk factors in the discharge record.
The Comprehensive Care for Joint Replacement (CJR) model and the Bundled Payments for Care Improvement Advanced (BPCI Advanced) model are CMS episode-based payment programs that function independently of ACO participation but share the goal of reducing post-discharge costs and readmissions after surgical procedures. Many surgical practices participate in both an MSSP ACO and a CMS episode-based payment model. In such cases, the documentation requirements of the episode-based payment model (including 90-day post-discharge follow-up documentation and post-acute care coordination records) generally satisfy and support the ACO's post-discharge quality documentation requirements as well. Practices participating in both programs should confirm with their ACO how episode-based model reconciliation interacts with MSSP shared savings calculations.
Post-Discharge Care Coordination Obligations for ACO-Participating Surgeons
MSSP ACO participation agreements typically require that participating providers use the ACO's preferred post-acute care network for discharge referrals, or document clinical reasons for referring outside the network when the patient consents to use of the preferred network. The preferred post-acute care network is selected by the ACO based on quality scores, readmission rates, and cost performance of skilled nursing facilities, home health agencies, and rehabilitation facilities. For surgical practices, this means that discharge planning documentation should record whether the patient was offered the ACO's preferred post-acute care options, whether the patient accepted or declined a preferred-network referral, and the clinical basis for any referral outside the preferred network. CMS does not require beneficiaries to use preferred-network post-acute providers, but ACOs are required to present the information to patients and to document the presentation.
Transition of care communications between the surgical practice and the patient's primary care provider within the ACO are a documented quality function under MSSP. CMS expects that ACO-participating providers have processes for communicating discharge information across the care team within 48 hours of discharge, consistent with the transition of care communication standard in the hospital discharge planning regulations. For outpatient surgical practices, this means generating a discharge summary or procedure note that is transmitted to the patient's ACO primary care provider within the time frame specified in the ACO participation agreement, which typically mirrors the 48-hour standard. Documentation of the date and method of the transition of care communication should be retained in the surgical record.
Medication reconciliation at surgical discharge is a specific care coordination obligation that affects ACO quality scores. The MSSP quality measure ACO-44 (Medication Reconciliation Post-Discharge) requires that the primary care provider perform and document medication reconciliation within 30 days of a hospital or ASC discharge. While this measure is attributed to the primary care provider, surgical practices contribute to the measure's completion rate by generating accurate medication lists at the time of discharge and transmitting them to the primary care provider. A surgical discharge summary that does not include a current reconciled medication list delays or prevents the primary care provider's completion of the post-discharge medication reconciliation and adversely affects the ACO's ACO-44 performance.
Remote patient monitoring and structured telephone follow-up after surgery are care coordination activities that can be billed using Transitional Care Management (TCM) codes (CPT 99495 and 99496) by the surgical practice or the primary care provider, but not by both for the same 30-day discharge period. TCM services require interactive contact with the patient within 2 business days of discharge, medication reconciliation, and a face-to-face visit within 7 days (CPT 99496) or 14 days (CPT 99495) of discharge. ACO-participating surgical practices that provide TCM services should document each required component (date of interactive contact, medication reconciliation, visit date) in the patient record because CMS audits TCM billing against documentation of all required components.
Documentation Standards That Support ACO Quality Reporting
Accurate and complete documentation of patient comorbidities at the time of surgical discharge directly affects the ACO's risk-adjusted quality scores. MSSP uses Hierarchical Condition Categories (HCC) to risk-adjust per-beneficiary cost benchmarks. HCC coding is driven by diagnosis codes submitted on claims. A surgical discharge record that documents only the procedural indication and fails to code documented comorbidities (diabetes, chronic kidney disease, congestive heart failure, chronic obstructive pulmonary disease) results in undercoding of the patient's HCC score, which reduces the ACO's risk-adjusted benchmark and makes the ACO's cost and quality performance appear worse relative to its patient population's actual complexity.
The surgical operative note and discharge documentation must reflect the full scope of conditions addressed or managed during the surgical episode, not only the primary procedure indication. CMS guidance on HCC coding specifies that all conditions that affect patient management during the encounter, including comorbidities that affect anesthesia management, perioperative medication management, or post-discharge planning, should be coded on the claim. A standard practice of limiting surgical claims to the primary procedure code and the surgical indication diagnosis, without coding the comorbidities that affected the episode, is a systematic undercoding practice that affects both the practice's MIPS performance and the ACO's risk-adjusted benchmarks.
ACOs are required under MSSP program rules to provide attributed beneficiaries with an annual notification that they are assigned to an ACO and information about how the ACO uses their claims data. Surgical practices participating in ACOs are typically required by their participation agreements to support this notification obligation by providing the ACO with current patient contact information for attributed beneficiaries and by cooperating with the ACO's patient engagement activities. Surgical practices should document in their participation agreement review records whether and how the ACO's patient notification obligation was communicated to the practice.
Quality measure data submission for MSSP is handled at the ACO level, but individual participating practices may be required to submit clinical quality data through the ACO's quality reporting infrastructure rather than submitting directly to CMS under MIPS. Surgical practices should confirm whether their ACO submits on their behalf for MIPS purposes and, if so, which quality measures the ACO reports for the practice's specialty. Submitting quality data both through the ACO and directly to CMS under MIPS for the same performance period can result in a dual submission that invalidates one or both submissions. Surgical practices should have a documented agreement with their ACO specifying which entity is responsible for MIPS quality data submission for each performance year.
How does ACO participation affect a surgical practice's MIPS reporting obligations?
Surgical practices that participate in an MSSP ACO may qualify for the MIPS Alternative Payment Model (APM) scoring standard, which applies a different scoring methodology than the standard MIPS track. To qualify, the practice must be a Qualifying APM Participant (QP), which requires that a threshold percentage of the practice's Medicare revenue or patients flow through the ACO's MSSP agreement. CMS sets QP thresholds annually and publishes the current thresholds in the annual Physician Fee Schedule rule; practices should verify their QP threshold with their ACO at the start of each performance year. QP-qualifying practices receive a flat MIPS score for the performance year and are exempt from standard MIPS data submission requirements. Practices that do not meet the QP thresholds are subject to standard MIPS requirements unless they qualify as a Partial QP and choose to opt out of MIPS.
Are surgical practices required to use an ACO's preferred post-acute care network?
CMS regulations governing MSSP ACOs permit ACOs to establish preferred post-acute care networks and to present network options to attributed beneficiaries, but CMS does not allow ACOs to require beneficiaries to use preferred network providers or to condition ACO participation on post-acute care network compliance. Beneficiaries retain the right to choose any Medicare-certified post-acute provider regardless of ACO network status. Surgical practices participating in ACOs are expected to present the ACO's preferred network options to patients when making post-acute referrals and to document whether the patient was offered the preferred network options and whether they accepted or declined. Practices that consistently refer attributed patients to non-network post-acute providers without documenting patient preference may receive inquiries from the ACO's compliance function, but CMS does not impose penalties on individual providers for individual post-acute referral decisions outside the preferred network.
What is an MSSP ACO's financial obligation to participating surgical practices when shared savings are distributed?
MSSP ACO shared savings distributions to participating practices are governed by the ACO's participant agreement and distribution methodology, which CMS requires to be documented in the ACO's governing documents submitted at the time of application. CMS does not set specific formulas for how ACOs distribute savings to participants, but CMS does require that the distribution methodology be specified in advance and applied consistently. Surgical practices participating in ACOs should review the distribution methodology in their participation agreement and understand: how their attributed beneficiaries are counted in the ACO's total beneficiary pool, what quality performance thresholds must be met before the practice receives shared savings, whether the practice is also subject to shared losses under two-sided risk track arrangements, and the timing of distribution payments relative to CMS's annual MSSP reconciliation cycle, which typically distributes results approximately 18 months after the end of the performance year.
How does documentation of post-discharge follow-up affect a surgical practice's ACO quality score?
Post-discharge follow-up documentation affects ACO quality performance through several interconnected mechanisms. First, documentation of the transition of care communication to the primary care provider supports completion of the ACO's transition of care quality measure, for which the ACO needs evidence that a discharge summary was transmitted within 48 hours. Second, if the surgical practice bills for Transitional Care Management services, the documentation of each required TCM component (interactive contact within 2 business days, medication reconciliation, face-to-face visit within 7 or 14 days) directly determines whether the TCM claim is payable and contributes to the ACO's post-discharge care coordination quality metric. Third, accurate comorbidity coding on the discharge claim affects the ACO's HCC risk score, which adjusts the benchmark against which the ACO's total cost of care is measured. Practices whose surgical discharge documentation routinely omits comorbidity coding undermine the ACO's risk-adjustment benchmark and make the ACO's cost performance appear worse than it actually is relative to the attributed population's clinical complexity.
For practices
Bring this to your own practice.
QR Rx turns every procedure into a branded recovery plan that keeps patients engaged and brings them back. Start free in minutes, or see it live in a 20-minute demo.
This blog provides general information about healthcare compliance and aftercare best practices. It does not constitute legal, medical, or regulatory advice. Consult qualified professionals for guidance specific to your practice.
