Updated June 1, 2016: Modified for 50,000 attributed members


The proliferation of the Accountable Care Organization is causing a ripple of change in healthcare. It is clear that physician groups who truly want to succeed as ACO “entities” must transform themselves. The transformation cannot be random or incidental; rather the transformation must be a directed initiative to move to a population health management approach. This transformation entails not only managing the “visible” population, (i.e. the patients who present on a regular basis) but also managing the “invisible” population – the patients who are non-compliant and for whatever reason choose NOT to schedule regular visits with their physicians.

In the ACO model, it is the aggregate results across ALL patients that matter – which includes both the “visible” and the “invisible” populations.

ACOs MUST have a determined method of proactively reaching out to every ACO member every year to assess their health. Even if a patient is healthy today, he or she may be sick or fall tomorrow. The ACO’s shared savings directly increases when the ACO can prevent or mitigate the patient’s illness or fall.

This paper will explore the pros and cons of an aggressive health risk assessment (HRA) program, namely using the Medicare Annual Wellness Visit (AWV) as a tool for assessing the risk of an entire population of patients.

Because the Annual Wellness Visit is a billable event, many ACOs are unwilling to take on this powerful tool because of the “cost” it adds to the ACO’s expense side. However, as this paper will show, the “cost” is quickly outweighed by the “benefit” realized by reduced ER and hospital stays, less chronic disease costs and lower medication and ancillary costs.

In other words, the AWV is an investment that every ACO must take on in order to intelligently know WHICH patients to manage. This is the key concept behind population health management – it is an “intelligent” transformation from the randomness of fee-for-service. Instead, ACO leaders are DIRECTING care using the most available data possible.

But we ARE Managing our Population!

These words are often used by new ACOs to defend their preventive health practices. Unfortunately, they hold little to no weight in the real world. The AMGA says it well: “Traditional disease management programs seek to address the needs of complex patients, some of whom have five or more conditions (e.g., diabetes, heart disease, obesity, hypertension and lipidemia). These patients may be seeing different physicians and taking one or more drugs for each condition potentially causing adverse interactions. But by just focusing on this group, which typically constitutes about 2% to 5% of a population, the care team is missing the opportunity to prevent OTHER patients from developing advanced disease. Because health status is fluid, the real challenge is managing and coordinating the care of EVERY patient in a population across the spectrum of health”.1

AMGA further articulates the mission: “As a well-known 2003 RAND study showed, patients receive  only 55% of recommended acute, preventive and chronic care2. One reason is their lack of compliance or contact with providers. In any practice, for example, there are likely to be patients  with diabetes who have not been in for a year or more, or have an A1C value > 9.0 and haven’t been scheduled for the next A1C test. And it’s likely that there are patients in the physician panel who are obese because of poor nutrition and lack of routine exercise; these individuals may develop diabetes unless life-style changes take place. In an [ACO] framework with ACO financial and clinical performance requirements, patients who have all the precursors of high-cost/high-risk conditions will have to be identified and managed.”3

What Then?

The obvious answer to the needs of an ACO to manage their ENTIRE population is to ASSESS their population on a regular basis. This paper will demonstrate the model of using the Medicare Annual Wellness Visit as a vehicle of assessment and will show the cost/benefit structure to such a program.

Time is Critical 

Before we talk about cost/benefit, let’s get real for a minute. As anyone who has either been a primary care physician or has managed a PCP office knows, time is a precious ingredient. Primary care doctors today are overwhelmed by time constraints. We all know the reasons why, so we won’t repeat what is already known. Instead, let’s just say clearly that a method of engaging patients proactively without using physician time or resources must be at the core of any assessment program. Merely putting a new template in your EHR won’t cut it; instead the ACO needs an affirmative program of patient engagement. This involves an outreach effort through traditional media (postcards) and call center systems. Whatever program the ACO uses to assess risk of their population MUST have an effective strategy to engage 60% or more of their patient population; any less of a  result will render the program ineffective.


Equally important to patient engagement is the vehicle used by the ACO to document the visit correctly (to the absolute standards of CMS) and effectively for the physician’s use. This document must be clear and succinct and must include a Risk Factor analysis, 5-year Plan and Personal Health Advice for the patient. Additionally, it’s very important to put recommended treatments, procedures and covered services in the document so the physician can see what possible diagnoses are indicated by the patient’s risk factors.

If possible, the physician should be afforded related HCC Risk Adjustment information (ICD-10 codes) primarily so that they can consider additional diagnoses. Secondarily, by leveraging the HCC risk codes, physicians will have a chance to begin thinking about this strategy as it pertains to managing risk contracts.

Here is an example of a section of such a report that clearly outlines the fingertip data needed by the physician4:

Medical Decision Making

Possible HCC RAF Coding for consideration:

CHF [85-I50.9], PAD [108-I77.9], MCI [52-G31.84], Major Depression [58-F10.20], Muscle Weakness [39 M62.81], RA [40-M06.9], Depression [F32.9], Generalized Anxiety Disorder [F41.1], Depressive Disorder [F32.9], Overweight and Obesity [E66.9], Generalized Pain [R45.83].

Recommended Procedures, Treatments and Preventive Services:

  • Patient may have drinking habits that go beyond recommended levels. We recommend further screening (e.g., CAGE-AID) [G0442] and counseling [G0443].
  • A Lipid Panel [80061] screening for CVD is recommended once, every five
  • A CVD risk reduction visit [G0446] is recommended, once a
  • Patient may be eligible for diabetes self-management training. (DSMT) [G0108], [G0109].
CVD ( + ) Continue monitoring BP, cholesterol, BMI. Stroke/TIA
Cognitive Impairment ( +++ ) Continue monitoring cognitive impairment. Consider referral to neurologist.

Colorectal Cancer


( ++ )

Counsel patient on fatty red meat, fried food and saturated fat intake. Consider referral to Registered Dietician if warranted.
Depression ( ++ ) Continue monitoring early warning signs of depression.
Diabetes ( + ) Continue monitoring lipids, BMI, waist. Retinopathy
Functional Capacity and Safety ( ++ ) Continue monitoring safety, driving habits, handrails and slippery surfaces.
Osteoporosis/Arthritis ( + ) Continue monitoring bone density. Consider calcium supplement. Bone Loss


Prostate Cancer



( + )

Counsel patient on lean vs fatty red meat and high- fat dairy product intake. Suggest a diet with more fish, green leafy vegetables and lower fat. Obesity is a risk factor for prostate cancer. Suggest a higher level of exercise.
Stroke/TIA ( + ) Continue monitoring BP, aspirin intake.

Relative Risk Factors

Such a section within the Provider Report gives the physician instant data on relative risk factors so they can plan their care for the patient and PREVENT the onset of chronic disease and falls.


The other key piece of the puzzle for the ACO is the ability to access data on their population. The most critical need is to be able to risk stratify their patient population across all practices in their ACO and do it easily. This is often a confused point, because many ACOs have access to claims data and believe they have all that they need. Remember: claims data is “retrospective.”  What is truly needed is “prospective” data, which gives care coordination teams insight into patients with potential problems that can be mitigated prospectively.

WellTrackONE, by example, provides an integrated data analytics system called “AccessONEtm” that gives care coordination teams access to claims data, EHR data5 AND prospective risk assessment data – all of which constitute the best possible data set to properly manage an ACO’s entire patient population.

Cost vs Benefit

The basic question at hand is this: “Does it make sense for an ACO of 10,000 members (for example) to expense the cost of the Annual Wellness Visit for some portion of that population (let’s assume 70% or 7,000 members per year) with the objective of mitigating the onset of chronic disease, falls and other acute events in that population

This model will explore the two cases of “With” and “Without” a risk assessment program in place for such an ACO. In doing so, we’ll look at the population statistics of this 10,000 member ACO as referenced by the AMGA research:

Prevalence of Common Chronic Disease for Physician Panels of 10,000 Patients6:

Entire ACO Being Managed NOT
Sample ACO Population 50,000
Members with chronic disease:
Hyperlipidemia 10,220 511 9,709
Hypertension 9,440 472 8,968
Depression 2,360 118 2,242
Asthma 3,660 183 3,477
Diabetes 2,900 145 2,755
Arthritis 7,620 381 7,239
Anxiety 5,580 279 5,301
Osteoporosis 2,800 140 2,660
COPD 2,620 131 2,489
CAD 2,400 120 2,280

In looking at cost/benefit of any AWV program within an ACO, you must first understand how your population is currently being managed. The assumption is that the “Being Managed” group (here shown at the higher level of 5%) is currently under care of the ACO’s Care Coordination Team.

However, the “NOT Managed” group constitutes those patients who have chronic disease and who are “off the radar” or part of the “Invisible” population. THIS is the group that an effective AWV program can affect.

For our model, we will assume that the AWV program will be successful in outreaching to 70% of the “NOT Managed” population and will cause an AWV visit that will generate relative risk factors for the physicians. However, not all of the 70% group will allow themselves to be managed correctly. Therefore, we will discount that to 35% “effective management” (half of the 70% outreach population). This means that our model assumes that with a consciously applied AWV program, an ACO will be able to manage 35% of the “NOT Managed” population and can mitigate at least 1% of that population in the first year. If we assume this “worst-case” scenario of only 1% mitigation, then we can look at the lowest common denominator position of ACO management with an effective AWV program in place.

AMGA research also shows the following risk factor data prevalent in an ACO population:

Health Risk across the Population: Prevalence Estimates by Size of Physician Practice7:

Entire ACO Being Managed NOT
Sample ACO Population 50,000
Members with Risk Factors:
Alcohol Use 11,000 550 10,450
Poor Nutrition 48,000 2,400 45,600
Physical Activity 24,000 1,200 22,800
Sexual Behavior 500 25 475
Skin Protection 17,000 850 16,150
Smoking 5,500 275 5,225
Stress 17,500 875 16,625
Depression 6,000 300 5,700
Weight Management 32,000 1,600 30,400
Overweight 16,500 825 15,675
Obese 12,500 625 11,875
Extremely Obese 3,000 150 2,850

We will use the same assumptions of effective outreach (75%) with effective management (35%) and mitigation of risk (1%) in our cost/benefit model.

Additionally, we will add in common acute “events” that will be mitigated, such as broken hip/leg, heart attack, colon cancer, diabetes with complications and stroke. It is very reasonable to assume that the care coordination team can isolate and modify behaviors of these high-risk patients to prevent the acute events from occurring.

Taken as a whole against the “NOT Managed” population, then, we see the following estimated number of cases that can be mitigated with an effective AWV program in place:

Being Managed NOT
Positive Outreach Positive Management Mitigate Disease
Sample ACO Population of 50,000
Members with Chronic Disease:
Hyperlipidemia 511 9,709 6,796 3,398 34
Hypertension 472 8,968 6,278 3,139 31
Depression 118 2,242 1,569 785 8
Asthma 183 3,477 2,434 1,217 12
Diabetes 145 2,755 1,929 964 10
Arthritis 381 7,239 5,067 2,534 25
Anxiety 279 5,301 3,711 1,855 19
Osteoporosis 140 2,660 1,862 931 9
COPD 131 2,489 1,742 871 9
CAD 120 2,280 1,596 798 8
Members with Risk Factors:
Alcohol Use 550 10,450 7,315 3,658 37
Poor nutrition 2,400 45,600 31,920 15,960 160
Physical Activity 1,200 22,800 15,960 7,980 80
Sexual Behavior 25 475 333 166 2
Skin Protection 850 16,150 11,305 5,653 57
Smoking 275 5,225 3,658 1,829 18
Stress 875 16,625 11,638 5,819 58
Depression 300 5,700 3,990 1,995 20
Weight Management 1,600 30,400 21,280 10,640 106
Overweight 825 15,675 10,973 5,486 55
Obese 625 11,875 8,313 4,156 42
Extremely Obese 150 2,850 1,995 998 10

Any cost/benefit model must look at NET savings for the ACO program. Our formula will take the number of mitigated cases times the estimated yearly cost of that chronic disease or risk factor, which will include all ACO costs such as ER, Hospital, LTC, SNF, Ambulatory, PCP, Specialty, Ancillaries (labs/imaging), and medications.

As an example, research shows that a case of un-managed diabetes with complications will cost $3,151  yearly on average. If 7 cases can be prevented, that would result in a decreased cost of $3,151 X 7 or $22,057 yearly.

We further assume that the ACO’s MSSP recovers HALF of the savings realized (50% to Medicare and 50% to the ACO).

Finally, we are averaging the expense of the average AWV with the G0438 at $175 and the G0439  at $115 or an average of $290/2 or $145. This would show up as an EXPENSE to the ACO (or chargeback) of $145 X 35,000 engaged members or $2,601,274 per year for 35,000 out of 50,000 members engaged each year.

What our model says, in essence is this:

“Whatever medical management and mitigation of chronic disease or risk factors results in shared savings for the ACO must be MORE than twice the cost of the AWV program in order to make financial sense. At a 50% MSSP rate, that would mean that the ACO with 50,000 members must  prevent disease or fall/injury cost to the ACO in the amount of $5,075,000 per year to justify an AWV program that will cost $2,601,274 per year.”

Is this possible?  Let’s analyze the costs.

Typical MSSP with an AWV program

We researched disease cost 8,9 for this white paper and interpolated as needed to come up with typical ACO costs of diseases, risks and falls.

Then we applied the “worst-case” mitigation results (1%) against those disease costs. That arrived at  an overall ACO cost reduction per disease, chronic disease and acute event. The individual costs per year of these risks are as follows:

  • Annual average cost of alcoholism 14 $746
  • Annual average cost of poor nutrition cost 15 $2,566
  • Annual average cost of no physical activity 16 $1,437
  • Annual average cost of bad sexual behavior 17 $3,680
  • Annual average cost of skin cancer 18 $4,789
  • Annual average cost of smoking 19 $1,880
  • Annual average cost of stress 20 $1,228
  • Annual average cost of depression 21 $1,290
  • Annual average cost of obesity 22 $1,244
    We also researched the cost of acute events to include:
  • Broken Hip (including surgeon’s fees) 10 – $63,742
  • Heart Attack 11 $268,578
  • Colon Cancer 12 $200,000
  • Diabetes with Complications 13 $55,555 Then we applied the MSSP rate of 50% to our

Here are the results we predict with a 1% mitigation from the AWV/AWV:

Cost of Disease Expense Reduction Shared Savings
Sample ACO Population of 10,000
Members with Chronic Disease:
Hyperlipidemia 34 $1,264 $42,953 $21,476
Hypertension 31 $1,245 $39,078 $19,539
Depression 8 $2,693 $21,132 $10,566
Asthma 12 $4,785 $58,231 $29,116
Diabetes 10 $3,151 $30,384 $15,192
Arthritis 25 $2,390 $60,554 $30,277
Anxiety 19 $2,693 $49,965 $24,982
Osteoporosis 9 $2,390 $22,251 $11,125
COPD 9 $1,862 $16,221 $8,110
CAD 8 $5,862 $46,779 $23,389
Members with Risk Factors:
Alcohol Use 37 $746 $27,285 $13,642
Poor nutrition 160 $2,566 $409,534 $204,767
Physical Activity 80 $1,437 $114,673 $57,336
Sexual Behavior 2 $3,680 $6,118 $3,059
Skin Protection 57 $4,789 $270,698 $135,349
Smoking 18 $1,880 $34,381 $17,190
Stress 58 $1,228 $71,454 $35,727
Depression 20 $1,290 $25,736 $12,868
Weight Management 106 $1,244 $132,362 $66,181
Overweight 55 $1,244 $68,249 $34,124
Obese 42 $1,244 $51,704 $25,852
Extremely Obese 10 $1,244 $12,409 $6,204
Members with Acute Events:
Broken hip/leg 183 $63,742 $1,274,840 $637,420
Heart attack 133 $268,578 $5,371,560 $2,685,780
Colon cancer 108 $200,000 $4,000,000 $2,000,000
Diabetes with Complications 20 $54,700 $1,094,000 $547,000
Stroke 20 $100,000 $2,000,000 $1,000,000

Summary of Results, 1% mitigation*

Total Net Shared Savings
Members with chronic disease $193,773
Members with risk factors $612,300
Members with acute injury $6,870,200
Less Cost of AWV @ $145 avg G0438/G0439
35000 members per year $5,075,000
NET SAVINGS TO ACO   $2,601,274

*Note: 1% mitigation translated means .36% of the “Not Managed” population. By example, if your “Not Managed” population is 1,942 members with Hyperlipidemia, then you would take 1% mitigation of 50% (positive management) of 70% (positive outreach) of your “Not Managed” population, or .36% of your total “Not Managed” population. So when you take this in context, we are looking at a “worst-case scenario” of the ACO being able to mitigate .36% of the “Not Managed” population better with an Annual Wellness Visit solution in place. We propose that those are good odds.

Sensitivity Analysis

10,000 members, Percent mitigation  

ACO Shared Savings

1% $2,601,274
2% $10,277,547
3% $17,953,821
4% $25,630,095
5% $33,306,368


What we have attempted to demonstrate in this paper is the power of an Annual Wellness Visit program within an ACO. For our hypothetical ACO of 50,000 members, the known “cost” of the AWV  is $5,075,000 per year. At a 50% MSSP, the ACO has to reduce cost annually by at LEAST twice that amount or $10,150,000 just to breakeven with an AWV program. With a solid program of risk  assessment coupled with a solid care management program such as CCM, any ACO should be able to reduce its overall cost of 50,000 members by $15,000,000 at a minimum. We believe the results can and should be much higher, typically in the 4-5% or higher range, giving MSSP results of more than $25,000,000 to $33,000,000 to the ACO.

While we have used 1% mitigation as our bottom-line standard (.36% of the “Not Managed” population), logic dictates that with a solid medical management program focused on the “Not Managed” population, such as Chronic Care Management (CCM), the ACO can dramatically increase the mitigation result to a higher value. Any mitigation value over 1% translates to pure shared savings for the ACO and drops income to the physicians who are “transforming” their practices to meet the needs of the ACO member population.

One other critical benefit of a well-managed AWV program for an ACO is the increase in attribution for that ACO. Many AWVs result in additional face-to-face visits with the PCP which in turn can increase attribution of the non-active member into the ACO.

We conclude that an effective AWV program IS very cost-effective for an Accountable Care Organization and gives the ACO the chance to increase their Shared Savings substantially. Medical management is key to any ACO, but risk detection is the starting point.

Download a Hard Copy: The Use of Annual Wellness Visits in ACOs – 50000 Population


  1. American Medical Group Association with Phytel, Inc – ACOs and Population Health Management,
  2. Elizabeth A McGlynn, Steven M Asch, John Adams, Joan Keesey, Jennifer Hicks, Alison DeCristofaro and Eva A Kerr. 2003. The Quality of Health Care Delivered to Adults in the United States. New England Journal of Medicine 348(36): 2635-2645.
  3. American Medical Group Association with Phytel, Inc – ACOs and Population Health Management,
  4. Provider Report – WellTrackONE Corporation (All Rights Reserved)
  5. Assuming the ACO has installed EHR interfaces to the WellTrackONE data
  6. American Medical Group Association with Phytel, Inc – ACOs and Population Health Management,
  7. American Medical Group Association with Phytel, Inc – ACOs and Population Health Management,
  8. DHHS AHRQ Cost Analysis – Cost adjusted to 2016
  9. American Academy of Allergy, Asthma and Immunology – Research Paper
  10. Cost Helper Health – Hip Fracture Cost
  11. Cost Helper Health – Heart Attack Cost
  12. Cost Helper Health – Cost of Colon Cancer
  13. NIH – Cost of Diabetes with Complications
  14. NIH – Cost of alcoholism
  15. USDA – Cost of poor nutrition – all factors
  16. CDC – Cost of low/no physical activity
  17. gov – Cost of STDs
  18. US News – Cost of skin cancer
  19. org – Cost of smoking
  20. com – Cost of stress
  21. AHRQ – Cost of depression
  22. org – Cost of obesity