CMS Announces Expansion of Medicare Accountable Care Organization Intiative

ACOs combined for a total net savings of $411 million in 2014.

New hospitals and health care providers have joined the Medicare Accountable Care Organization (ACO), representing 49 states and the District of Columbia.

The United States Department of Health & Human Services (HHS) released that the Centers for Medicare & Medicaid Services (CMS) gained 121 new participants that joined the ACO initiatives.

ACOs consist of doctors and hospitals who brainstorm and develop plans to change how medical care is paid for in the United States and improving on the way patients receive care in our health care system today. This group is paid based off of how successful their treatment was, instead of how many tests were performed.

“Americans will get better care and we will spend our health care dollars more wisely because these hospitals and providers have made a commitment to change how they do business and work with patients,” said HHS Secretary Sylvia M. Burwell. “We are moving Medicare and the entire health care system toward paying providers based on the quality, rather than the quantity of care they give patients. The three new ACO initiatives being launched today mark an important step forward in this effort.”

The ACOs combined for a total net savings of $411 million for 333 Medicare Shared Savings Program (SSP) ACOs and 20 Pioneer ACOs in 2014. The 2014 study results showed that the ACO programs started in 2013 and 2014 improved 27 of 33 quality measures.

This included patients ratings of clinician communication, beneficiaries’ rating of their doctors screening for tobacco use and cessation, high blood pressure screenings , and the use of the Electronic Health Records. The SSP ACOs recorded 18 out of 22 measures.

Now with new participants in the SSP, Next Generation ACO, Pioneer ACO, and Comprehensive ESRD Care Model, there will be 8.9 million beneficiaries served; 477 ACOs across SSP, Pioneer ACO, Next Generation ACO, and Comprehensive ESRD Care Model, and 64 ACOs in risk-bearing tracking in the 4 models.

The Next Generation ACO Model has 21 participants and will build on Pioneer ACO and SSP’s experiences to offer new opportunities in accountable care. These participants can take on higher levels of financial risk (up to 100%) than the current initiatives.

Even though they are at a higher risk, participants are more likely to share in more of the model’s savings through better care coordination and management. ACOs will also receive their budgets in advance in order to plan and manage care around the targets.

The Medicare Shared Savings Program had approximately 150 ACOs who renewed at the first of the year and gained 100 new groups. In 2016, about 15,000 physicians will participate in ACOs, allowing CMS to gain 434 ACOS in the SSP next year, serving around 7.7 million beneficiaries.