CMS Adds an Additional 89 Accountable Care Organizations

On Monday, July 9^th, the Centers for Medicare & Medicaid Services (CMS) announced an additional 89 accountable care organizations (ACOs) have officially entered into agreements with CMS to provide coordinated care for Medicare beneficiaries.

In a statement by Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, the additional ACOs are now providing care to approximately 1.2 million people in 40 states and Washington D.C.  Secretary Sebelius applauded each of these organizations, saying “Better coordinated care is good for patients and it saves money.”

Many ACO-like entities have existed and thrived in the private sector for years covering millions of Americans.  The CMS-sanctioned program is bringing more attention and focus to these emerging delivery systems.  It is likely that Brokers will see ACO-like entities entering many of their local markets as health plans as well, so it is important for us to understand the attributes of the ACO approach to coordinating care. 

Although the ACO program met with support from Washington, Brokers may be challenged if the ACO concept gains additional momentum.  If ACOs become risk bearing organizations competing with private health insurers, the role of Brokers may diminish substantially.  Likewise, if Exchanges offer direct access to ACOs, Brokers may be further excluded from the health care marketplace.  The good news is there are several examples already in the private sector where ACO-like entities have teamed up with local Brokers to sell their health plan services to local employers.  In fact, several integrated hospital/provider systems have done this in major cities such as Washington, D.C. and Dallas, Texas. 

However, it is imperative that Brokers lobby for a definitive role in both public and private sector ACO programs moving forward.  Accordingly, BenefitMall has written extensively on the ACO movement.  More information can be found by clicking here. 

The ACO program was authorized by Section 3022 of the Patient Protection and Affordable Care Act (PPACA) and is supported by CMS with the goal of providing coordinated high quality care to Medicare patients.  By coordinating among doctors, hospitals, and other health care providers, ACOs can increase care coordination for patients through a more integrated delivery platform, avoid needlessly duplicative services, decrease the likelihood of potential errors, and reduce some federal expenditures. 

The total number of organizations now participating in the voluntary ACO program now equals 154.  Participants agree to take responsibility for the care of patients in exchange for the opportunity to share in the total savings, a number that may exceed $940 million over four years.  

In December, 32 organizations were deemed Pioneer ACOs.  These organizations were held financially accountable for the care provided to their patients, and were subject to public reporting of their performance on the CMS website.  All ACOs must comply with 33 quality standards relating to “care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and patient and caregiver experience of care.”  Six additional Physician Group Practice Transition Demonstration organizations were also added to the program in January, 2011.  For a current list of ACOs, click here.

In total, ACO organizations have provided care to more than 2.4 million beneficiaries throughout the country through the CMS program.  Almost half of these organizations are physician-driven, and serve relatively small populations of fewer than 10,000 beneficiaries.  To be eligible for the program, an applicant organization must be able to care for at least 5,000 Medicare enrollees.  Beginning this year, CMS will be accepting ACO applications annually. 

The CMS announcement identifying the 89 new ACOs follows the recent Supreme Court decision upholding the constitutionality of PPACA, and is evidence of the continued efforts by the federal government to continue implementing various provisions of the health care reform law. 

BenefitMall will continue to keep you apprised of the latest developments with Accountable Care Organizations.   For blog posts, legislative alerts, and other resources, visit www.HealthcareExchange.com or www.benefitmall.com .