HHS announces 89 new accountable care organizations

July 18, 2012
Jeffrey Bendix, MA
Jeffrey Bendix, MA

Accountable care organizations are growing in number and adapting in their ability to save costs. See what experts predict about their sustainability and how you can become involved.

The push to form accountable care organizations (ACOs) appears to be gathering steam.

Earlier this month, Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services (HHS) announced the formation of 89 new ACOs in 40 states and the District of Columbia. The new ACOs have entered into agreements with the Centers for Medicare and Medicaid Services (CMS) “taking responsibility for the quality of care they provide to people with Medicare in return for the opportunity to share in savings realized through high-quality, well-coordinated care,” according to a statement issued by HHS. The new ACOs provide medical care to 1.2 million Medicare recipients.

HHS defines ACOs as a group of healthcare providers who give coordinated care and chronic disease management, thereby improving the quality of care patients receive.  ACOs are paid through the Medicare Shared Savings Program (MSSP). Their payment is tied to achieving healthcare quality goals and outcomes that result in cost savings.

“This new group of ACOs adds to a solid foundation,” says Marilyn Tavenner, acting CMS administrator. She adds that the latest round of ACO formation brings to 2.4 million the number of Medicare beneficiaries in ACOs. CMS is the division of HHS responsible for overseeing the accountable care program.

Reed Tinsley, CPA, a healthcare practice consultant in Houston, Texas, tells Medical Economics that the latest announcement shows that the ACO movement has “traction.”

“In the original regulations, under one of the models you had to pay back losses, but the final regulations eliminated that part, so it doesn’t hurt anyone to try out this experiment, except for the cost [of care integration],” Tinsley says.

Nearly half of the new group of ACOs are physician-driven organizations serving fewer than 10,000 beneficiaries. “The feeling is that the physician-driven is the more successful model, because the doctors are the ones directing healthcare costs,” Tinsley says. “They’re the ones putting patients in facilities for their care, which is where your high costs are. The idea is they know more how to save costs than a hospital administrator trying to manage physicians.”

CMS will accept applications August 1 to September 6 from organizations that want to form ACOs to participate in the MSSP beginning next year. More information, including application requirements, is available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Application.html .

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