Medicare and private payers have expanded reimbursement under Accountable care organizations (ACO). You are the chief financial officer (CFO) of a hospital system that is forming an ACO to participate in these payment models. The ACO seeks to improve care coordination for its patients with chronic conditions. To provide better care management, the ACO is interested in investing in primary care physicians and physician's assistants to provide more intensive care management services. After formation, the ACO will enter contracts with Medicare and private insurers under alternative payment models, including shared savings, bundled payments, and global capitation. The ACO will need to determine how to set up reimbursement payments to ACO providers and consider whether financial incentives are required to ensure ACO providers deliver efficient care.

• How might you set up the reimbursement payments to ACO providers, considering the alternative payment models (i.e., fee for service, shared savings, bundled payments, or global capitations)?
• What utilization management controls might you add to align the interests of ACO providers?