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Newsletter Article


89 New ACOs Join Medicare Program

By Rebecca Adams, CQ HealthBeat Associate Editor

July 9, 2012 -- The number of accountable care organizations (ACOs) in Medicare is growing faster than industry leaders had predicted when the program's rules were finalized last fall. As of July 1, 89 new ACOs had begun serving 1.2 million people, bringing to 154 the number of groups in the Medicare shared-savings effort in 40 states and Washington, D.C.

The 2.4 million Medicare beneficiaries participating in ACOs is still a minority in the 46-million-patient Medicare program. But as Centers for Medicare and Medicaid Services (CMS) principal deputy administrator and Center for Medicare director Jonathan Blum noted in a call with reporters, when the regulations for the program were first proposed, "there were many doubts about whether ACOs would come into the program."

ACOs bring groups of doctors and other medical providers together to coordinate care for Medicare patients.

The federal government could save up to $940 million over four years from the initiative, according to CMS. Almost half the ACOs are physician-driven groups serving fewer than 10,000 beneficiaries.

The interest from medical providers who want to participate in 2013 is greater than those participating this year. Groups that want to join the shared-savings program next year needed to file a notice of intent last month indicating that they will apply. They will need to complete their applications between Aug. 1 and Sept. 6. CMS officials said that more than 400 groups have notified the agency that they will submit applications.

"That gives us even more confidence that this program will grow over time," Blum said.

The wide array of groups that have signaled interest also should dispel doubts about whether the program will survive, Blum suggested.
"Obviously we are pleased with the overall numbers of the program, but we're more pleased with the diversity of the program," he said.

Medical providers throughout the nation are also participating in other ACO-type initiatives led by private industry or the federal-state Medicaid program seeking to increase the coordination of care for patients and save money.

"This is not a trend only for the Medicare program but for all payers trying to move in this direction," Blum said.

All Medicare ACOs that cut the rate of spending growth in the cost of care without compromising the quality of care may share in the Medicare savings. ACOs will have to demonstrate high-quality care by reporting 33 different performance measures.

Five of the ACOs that were announced last week are in a version of the program that allows them to get a higher share of any savings by also putting themselves at risk for sharing in any losses if the costs of care for their patients rise, said CMS officials. In the future, all of the 89 ACOs will have to accept the risk of losses in their next contract period.

The 154 ACOs include the group recently announced, the 27 that joined the Medicare shared-savings program in April, the 32 in the Pioneer ACO demonstration and six Physician Group Practice Transition Demonstration groups that started in January 2011. The final rule for the shared-savings program was published on Nov. 2, 2011.

The most common reason that an organization may have been rejected is that it does not meet the requirement set out in the health care law (PL 111-148, PL 111-152) that the groups care for at least 5,000 patients, said Blum. Some groups asked for more time to grow their patient base and delayed their applications until the Jan. 1, 2013, start date.

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