HHS Approves 106 New ACOs Under Medicare for 2013

In a major expansion of the Medicare Shared Savings Program, 106 new accountable care organizations (ACOs) have been approved for 2013, the U.S. Department of Health and Human Services (HHS) announced Jan. 10.

The expansion brings the total number of ACOs established since 2012 under terms of the health care reform law to more than 250, serving about 4 million Medicare fee-for-service beneficiaries, the department said in a press release.

ACOs are legal entities formed by physicians and health care providers to furnish coordinated, quality care and disease management programs to beneficiaries (a minimum of 5,000). ACOs share the risk and rewards for keeping patients healthy. Beneficiaries in ACOs can choose health care providers within or outside their ACO.

ACOs have increased rapidly in two years, covering 10 percent of the population, or millions of patients both under Medicare and in the private health care sector, according to a recent report from the consulting group Oliver Wyman, headquartered in New York City.


Payment Incentives and Quality Standards
While Medicare continues to pay individual health care providers and suppliers for specific items and services as it currently does under Part A and Part B reimbursement, CMS sets a benchmark on per capita spending for each ACO against which its performance is measured to assess whether it qualifies to receive shared savings or to be held accountable for losses. Medicare could save up to $940 million over four years as a result of the initiative, HHS said.

The Centers for Medicare and Medicaid Services (CMS) has established 33 quality standards that ACOs must meet on care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and patient and caregiver experience of care.

Profile of the New ACOs
The new ACOs include a diverse cross-section of physician practices across the country. Roughly half of all ACOs are physician-led organizations that serve fewer than 10,000 beneficiaries. Approximately 20 percent of ACOs include community health centers, rural health clinics, and critical-access hospitals that serve low-income and rural communities.

The group also includes 15 Advance Payment Model ACOs. These are physician-based or rural providers who get access to capital to invest in staff, electronic health record systems, or other infrastructure required to improve care coordination. Medicare will recoup advance payments over time through future shared savings.

In addition to these ACOs, last year CMS launched the Pioneer ACO program for large provider groups able to take on greater financial risk for the costs and care of their patients over time.

The next application period for organizations that wish to participate in the Shared Savings Program beginning in January 2014 is summer 2013. A final rule addressing provider concerns was published in the Federal Register for Nov. 2, 2011 (NIR 11, 20/Nov. 3, pp. 4-5).

More information about the program is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/index.html?redirect=/sharedsavingsprogram/
. For a list of the 106 new ACOs, visit: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/News.html.

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