April 18, 2012
Previously published on April 17, 2012
On April 10, the Centers for Medicare & Medicaid Services (CMS) announced the first 27 accountable care organizations (ACOs) that will participate in the Medicare Shared Savings Program (MSSP), established under the Patient Protection and Affordable Care Act (PPACA). The 27 organizations chosen for the first round of the program, which began as of April 1, were selected from 50 applicants. Most of the organizations selected are led by physician groups, rather than hospitals. Five of the 27 initial ACOs will participate in the Advance Payment ACO Model, under which participants will receive advance payments to help cover their startup costs. Advance payments will have to be repaid out of the shared savings an ACO earns. The ACO program is kicking off despite uncertainty regarding the future of PPACA. In oral arguments before the Supreme Court last month, the law’s opponents argued that its linchpin, the so-called individual mandate, is unconstitutional. It is unclear whether the mandate will be struck down or, if so, whether other parts of PPACA will be allowed to remain in effect. The Court’s decision is expected in June. The goal of the MSSP is to incentivize healthcare providers to improve coordination of care, and reduce costs, for the Medicare beneficiaries for whom they are responsible. Quality of care will be measured by an ACO’s performance on 33 qualitative measures, and those ACOs that provide high-quality care while reducing costs will be entitled to share in the savings achieved by Medicare. At a press briefing, Jonathan Blum, Deputy Administrator of CMS, said that CMS is reviewing another 150 applications from organizations wishing to begin operating as ACOs on July 1. This group includes about 20 applicants that had wanted to begin on April 1 but whose applications were deferred. A third round will begin operations on January 1. The first 27 ACOs will serve about 375,000 Medicare beneficiaries in 18 states. Another 32 organizations were selected last December as Pioneer Model ACOs. The Pioneer model, designed for organizations that already have experience offering coordinated care, allows participating ACOs to receive a greater share of the cost savings they achieve, in exchange for assuming more risk. Including the six organizations participating in the Physician Group Practice Transition Demonstration, more than 1.1 million Medicare beneficiaries are assigned to ACOs as of April 1.
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