CMS Announces Funding for Rural ACOs

The Centers for Medicare and Medicaid Services (CMS) has announced a new investment initiative aimed at helping Accountable Care Organizations in rural and underserved areas.

The $114 million program will send funding to as many as 75 ACOs across the US, according to CMS.

“The ACO Investment Model will give Medicare Accountable Care Organizations more flexibility in setting quality and financial goals, while giving them greater accountability for delivering quality care efficiently,” said Marilyn Tavenner, CMS’ administrator.

Participating ACOs will get up-front money for health information technology infrastructure that aids in care coordination and quality control.

“We are working with these organizations to make necessary investments that encourage doctors, hospitals, and other healthcare providers to work together to better coordinate care and keep people healthy,” Tavenner said.

In order to participate, ACOs must have joined CMS’ Shared Savings Programs from 2012-2014, or must join the program in 2016. The application deadline is Dec. 1 for organizations already in the program. Those planning to join the Shared Savings Program in 2016 can apply for the investment initiative beginning next summer.

CMS said it hopes the initiative will ensure that quality, value-driven care will be available regardless of geographic location. The new emphasis on value and coordination is expected to result in overall healthcare savings.

CMS will recover the cost of the up-front investments as a result of those new savings, the agency said.

The funding was made possible by the Affordable Care Act, which spearheaded the move toward ACOs. CMS said practices in its Pioneer ACO and Shared Savings programs have already saved about $372 million in healthcare costs as a result of the efficiencies created by the ACO model.

Overall, CMS said health spending was down $4 billion in 2011 and 2012. They said the Affordable Care Act has also contributed to a 10% drop in hospital readmissions among Medicare patients from 2007-2013.