Healthcare Business News

Reform Update: HHS adds 123 Medicare ACOs, with about 1.5 million beneficiaries

By Andis Robeznieks
Posted: December 23, 2013 - 2:45 pm ET

(Story updated at 5:30 p.m. Central.)

HHS announced the latest round of accountable care contracts in the Medicare Shared Savings Program, adding 123 additional ACOs and reaching about 1.5 million more Medicare beneficiaries.

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The new contracts, which bring the total number of Medicare ACOs to more than 360, come as there is still little known about how the earlier adopters have fared in the program, which was established under the Patient Protection and Affordable Care Act. The first cohort of organizations in the Shared Savings Program, numbering 27, entered the program in April 2012.

The majority of the new ACOs are physician-led and each serve fewer than 10,000 beneficiaries. About 20% of them include community health centers, rural health clinics or critical-access hospitals, according to an HHS news release.

“This is a great example of the Affordable Care Act rewarding hospitals and doctors that work together to help our beneficiaries get the best possible care,” HHS Secretary Kathleen Sebelius said in the release.

The results were mixed for a small vanguard of organizations that joined the CMS Innovation Center's Pioneer ACO Model program and completed their first year at the end of 2012. This summer nine of them either switched to the less risky Shared Savings Program or opted out of Medicare accountable care altogether. Together, however, they were credited with saving $33 million for Medicare after accounting for the bonuses they receive for delivering care below benchmark costs.

Participants in the Shared Savings Program stand to earn financial bonuses if they are able to deliver care at lower costs while meeting targets on 33 quality measures, including patient and caregiver experience, care coordination, patient safety, preventive health services and improved care for at-risk populations.

The new group includes several ACOs that had dropped out of the CMS Innovation Center's Pioneer ACO program during this past summer.

These include the DaVita HealthCare Partners' ACOs in California, Florida and Nevada; Physician Health Partners in Colorado; Premier Choice in California; and the Seton Health Alliance in Texas.

“We're actively participating in both commercial and Medicare ACOs,” said DaVita HealthCare Partners spokesman Robert Klein, adding that ACOs provide an opportunity for the organization “to bring our coordinated-care skills to bear” in working toward the healthcare triple aim of improving individual care and population health at a lower cost.

The University of Michigan Health System in Ann Arbor also dropped out of the Pioneer program and announced it was going to participate in a Medicare shared-savings ACO instead. Its name was conspicuously missing from the roster of new ACOs.

A health system spokeswoman, however, explained that—as of Jan. 1—most of the 1,700 faculty physicians and other doctors who participated in the Pioneer program will be moving into an existing shared-savings ACO, the Physician Organization of Michigan, which was launched in January 2013.

Follow Andis Robeznieks on Twitter: @MHARobeznieks

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