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Federal Officials Offer Funding for Rural ACOs

By Rebecca Adams, CQ HealthBeat Associate Editor

October 15, 2014 -- Federal officials trying to spur medical providers in rural or underserved areas to form accountable care organizations (ACOs) are offering up to $114 million in upfront investments to as many as 75 provider groups.

ACOs that join the Medicare Shared Savings Program in 2016 are eligible, as are other ACOs that joined the program in 2012, 2013, or this year. Provider groups can spend the money on infrastructure or redesigning medical care that uses health information technology.

"The ACO Investment Model will give Medicare Accountable Care Organizations more flexibility in setting quality and financial goals while giving them greater accountability for delivering quality care efficiently," said Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner. "We are working with these organizations to make necessary investments that encourage doctors, hospitals and other health care providers to work together to better coordinate care and keep people healthy."

The application deadline for organizations that started in the Shared Savings Program in 2012 or 2013 will be Dec. 1, 2014. Applications will be available next summer for ACOs that joined the Shared Savings Program this year or will start in 2016.

The extra help to providers is available as officials at the CMS officials continue to reevaluate their approach to ACOs. Federal officials saw a dropoff in interest in one of their ACO models, known as the Pioneer program, that incentivized providers to participate in ACOs. Networks that don't achieve their goals face financial penalties by CMS. Some organizations, realizing they could be penalized for participating, have switched from the Pioneer program to the shared savings program, which is a better deal financially. Nineteen ACOs now participate in the Pioneer program, down from 32 three years ago.

However, the shared savings program has grown from 27 organizations in 2011 to 338 this year.

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