Healthcare Business News

Number of Medicare ACOs more than doubles

By Melanie Evans and Jessica Zigmond
Posted: July 9, 2012 - 10:45 am ET

(Story updated at 3 p.m. ET.)

Medicare's accountable-care experiment, which seeks to revamp how hospitals and doctors get paid, more than doubled in size with 89 newly named participants.

The CMS added the latest accountable care organizations (PDF) to 27 ACOs in its shared-savings program, which offers medical groups, hospitals and federally qualified health centers financial incentives for quality improvement and cost control. An additional 38 organizations operate under other Medicare accountable care contracts.

“The Medicare ACO program opened for business in January, and already, more than 2.4 million beneficiaries are receiving care from providers participating in these important initiatives,” acting CMS Administrator Marilyn Tavenner said in a statement (PDF).

“We are very pleased with today's overall numbers,” said Jonathan Blum, the principal deputy administrator and director of the Center for Medicare, on a conference call with reporters.

According to the CMS, the selected ACO programs operate in a range of areas nationwide and nearly half are physician-led organizations that serve fewer than 10,000 beneficiaries, which indicates smaller organizations are interested in participating. Blum said federal officials were pleased with the diversity of participating ACOs.

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Among the current list of ACOs is Advocate Health Partners in Rolling Meadows, Ill., which includes 2,237 physicians and will serve patients in Illinois; Iowa Health Accountable Care in Des Moines, which has 1,551 physicians and will serve beneficiaries in Illinois, Iowa and Missouri; and Coastal Medical, which is composed of ACO group practices with 100 physicians and will serve beneficiaries in Massachusetts and Rhode Island.

Five of the newly named ACOs selected the riskier of two payment options under the Medicare shared-savings program, Blum said. Organizations that agreed to accept potential financial risk could also see greater financial bonuses. The remaining 84 organizations opted for the payment option with no risk but less potential gain.

Meanwhile, the CMS announced that starting this year, applications for ACOs will be accepted annually. The application period is Aug. 1-Sept. 6, 2012 for organizations that want to participate in the Medicare shared-savings program starting in January 2013. Four hundred organizations submitted a notice of intent to apply next month, according to the CMS.

Not all organizations that sought to contract in July as accountable care organizations were able to care for at least 5,000 Medicare enrollees, as required by the Patient Protection and Affordable Care Act, which included Medicare's shared-savings program, Blum said. He said results were not yet available from Medicare ACOs that started earlier this year. “It's too early to give an indication of quality improvement, cost savings,” he said.

The initiatives are projected to save the program $940 million over four years, according to the CMS.

Editor's note:The CMS' list of new ACOs misspelled the name of Duluth, Minn.-based Essentia Health as Essential Health.

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