CMS Chooses 27 Medicare Shared Savings Program ACOs

As the nation waits for the Supreme Court to rule on the Patient Protection and Affordable Care Act (ACA), a key provision that will transform the delivery of healthcare is moving ahead.  According to Kaiser Health News, the Obama administration announced that 27 health systems have been designated as Accountable Care Organizations (ACOs) in Medicare’s Shared Savings Program, which offers financial incentives for physicians, hospitals and other healthcare providers to create more integrated healthcare delivery.  The new ACOs will serve an estimated 375,000 individuals in 18 states.

ACO supporters say they improve care for Medicare beneficiaries and slow rising costs by altering the incentives that affect how physicians and hospitals operate.  Experts cite as models such respected health systems as the Mayo Clinic and the Geisinger Health System of Pennsylvania.  Rather than being paid for each service, ACOs reward providers that manage chronic disease and meet certain quality standards, including reducing hospital admissions and emergency room visits.  If they improve care while holding down costs, the systems can share in the savings.

CMS is reviewing another 150 applications seeking to enter the program, suggesting that the Shared Savings Program is succeeding.  The program is “off to a very phenomenal start,” said Jonathan Blum, a CMS deputy administrator.  “We are on track to fundamentally transform the (Medicare) fee-for-service program.”

Late last year, the Department of Health and Human Services (HHS) chose 32 organizations to participate in an advanced version of the Medicare program.  These “pioneers” have made significant progress in developing the ACO model, with many already largely functioning as ACOs.  During their first two years the pioneers will assume more risk, but with a greater potential reward.  Although hospitals were expected to lead the ACO field, Blum noted that the majority of ACOs are physician-led organizations.  He also said many of the organizations are working with private health insurers to serve patients not in the Medicare program.

Chas Roades, chief research officer at the Advisory Board Company in Washington, D.C., warned that as the ACOS take off and “people actually start to deliver care in a different way, it’s messy and complicated.  There will be successes and failures, and it may go slower than policy-makers would like it to.”  According to Roades, it’s important that CMS create some way for the pioneer ACOs to share their data and best practices.  “It’s a slow ramp but everyone will be watching very closely to see how these early ACOs succeed,” Roades said.

Under the shared savings program, ACOs must meet 33 quality measures relating to care coordination and patient safety, appropriate preventive health services, improved care for at-risk populations and the patient experience of care – while reducing the costs of care.  ACOs that meet the standards will be eligible to share in the program’s savings.

“We are encouraged by this strong start and confident that by the end of this year, we will have a robust program in place, benefitting millions of seniors and people with disabilities across the country,” said CMS Acting Administrator Marilyn Tavenner.

Regarding the anticipated Supreme Court ruling, Emily Brower, an executive director with Atrius Health, operator of a pioneer ACO in Massachusetts, said “It’s not changing anything for us.  This is a model of care we’ve been trying to evolve into since before the pioneer program existed.  We’ll continue making investments, and if the law is overturned, we’ll be asking where the return on investment is for us, if not in shared savings.”

Writing for the e-Care Management blog, Vince Kuraitis is unimpressed.  “I had been anticipating this announcement as a defining moment for Medicare’s thrust into accountable care.  My expectations had been that we would see either:  Boom — a big splash of new Medicare shared savings ACOs announced, including big name hospitals and medical groups that were starting large scale ACOs, perhaps with hundreds of thousands of patients.  Bust — no one showed up at the party.  Providers would have concluded that Medicare ACOs were too risky, bureaucratic, and high effort.  This isn’t the defining moment I thought it would be.  But that defining moment might be just around the corner.  Medicare’s announcement included a mention that they have 150 more Shared Savings ACO applications waiting in the wings.  Is the boom around the corner?”

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