The Centers for Medicare and Medicaid Services (CMS) announced on April 10 that it has approved 27 accountable care organizations (ACOs) to participate in the Medicare Shared Savings Program authorized under section 3022 of the Affordable Care Act (ACA). These 27 ACOs are responsible beginning this month for coordinating care for 375,000 Medicare beneficiaries served by over 10,000 physicians in 18 states. This announcement follows CMS approval of 32 Pioneer Model ACOs in January 2012 and six Physician Group Practice ACOs in December 2011. Medicare beneficiaries participating under all of these 65 ACOs now exceeds 1.1 million.
CMS is reviewing another 150 ACO applications for approval in July 2012 and will solicit more ACO applications for approval in January 2013. CMS has estimated that as many as 270 ACOs could be formed over the next three years, replicating models pioneered by distinguished medical organizations such as the Mayo Clinic (Minnesota), the Cleveland Clinic (Ohio), Intermountain Healthcare (Utah and Idaho), and the Geisinger Health System (Pennsylvania) as well as the California Public Employees Retirement System (CALPERS) and leading health insurers such as Blue Shield of California.
CMS defines ACOs under section 3022 of the ACA as legal entities representing networks of physicians, hospitals, and other providers that agree to be held accountable financially for the quality and cost of care for fee-for-service beneficiaries. ACOs have an opportunity to earn “shared savings” bonus payments if they reduce Medicare Part A and Part B expenditures through more effective and efficient care while achieving high scores on 33 performance measures related to care coordination, preventive care, patient safety, and patient satisfaction. Final Medicare rules on ACOs were published in the Federal Register on November 2, 2011. CMS has estimated that the federal portion of the Medicare “shared savings” will be a net $940 million over four years after payout of bonuses. Private health insurers currently planning to launch new ACO initiatives include United Health Group, Aetna, Humana, Coventry Health Care, and Blue Cross plans in Illinois, Texas, and other states.