More to Come on ACOs in 2012…

Progress was made in 2011 with the new accountable care organization (ACO) program created under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), and more activity should occur as the new year rolls on.  Following the release of both the Medicare Shared Saving Program Final rule (discussed in detail in a recent post) and the Advanced Payment Model Notice on November 2, 2011, CMS also announced last month the 32 health care organizations that would participate in the Pioneer ACO initiative.

The Shared Savings Program, under which the new ACO entities are formed, is meant to provide better coordination of care to improve the health of Medicare beneficiaries, at a lower cost to the Medicare program.  A number of ways for organizations to participate in the Shared Savings program, the December 19th press release states, among them, the Advanced Payment and the Pioneer ACO Models.

The Advanced Payment Model, according to the November 2nd Notice, is available to help certain ACO participants to the Shared Savings Program get off the ground, by providing prepayment of shared savings expected to result from their participation.  That model is meant to test how advanced payments could increase participation in the Shared Savings Program.  Should an ACO not earn savings or not complete the agreement period, it would be required to repay the advanced payment.

The Pioneer ACO Model is meant for those organizations that have prior experience with coordinating patient care, and requires particating pioneer ACOs to “engage other payers in similar efforts to reward health care providers that deliver high-quality care.”  The December 19th press release states that the Pioneer ACO initiative will help those more experienced organizations to transition from a volume of service-based payment system to one based on the value of care provided.

According to the Pioneer ACO Model Fact Sheet issued by CMS, a few of the 32 organizations chosen to participate as Pioneer ACOs are the following: Banner Health Network in the Phoenix, Arizona area; Beth Israel Deaconess Physician Organization in Eastern Massachusetts; Monarch Healthcare in Orange County, California; and University of Michigan in Southeastern Michigan.  The CMS press release touts that the organizations chosen as pioneer ACOs are diverse, including both physician-led organizations and health systems, in urban and rural areas, in 18 states throughout the country.

As the first (three-year) performance period for the Pioneer ACO Model only began on January 1, 2012,  it will be some time before the effectiveness of this model can be determined.  As the Shared Savings Program and its various initiatives get started, however, the media will surely report on the success of the program as a whole.  All eyes are on these 32 pioneer ACOs to see whether initiatives such as these will spell success for this highly contentious provision of PPACA.