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ACOs Continue to be Popular, Latest HHS Report Shows

By Dena Bunis, CQ HealthBeat Managing Editor

January 10, 2013 -- The coordinated care model envisioned in the health care law continues to gain popularity as Health and Human Services officials announced last week that 106 more Medicare accountable care organizations (ACOs) have been formed, bringing to as many as 4 million the number of beneficiaries who will be part of such groups.

The announcement brings the number of ACOs that doctors and health care providers have established since the health law (PL 111-148, PL 111-152) was passed in 2010 to 259. At a forum in November, Centers for Medicare and Medicaid Services (CMS) official Richard Gilifillan had predicted the increase, saying that as many as 300 ACOs could be signed up in this third round of contracts for the so-called shared-savings model.

This effort at providing team-based care sets spending and quality targets. Any savings that result are then split between the federal government and the providers involved in the ACO, as long as the quality goals are also achieved. CMS has established 33 such quality measures on care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and patient and caregiver experience of care. CMS officials say the federal government could save up to $940 million over four years as a result of this program.

CMS officials also said that applications will be due this summer for the fourth round of contracts for ACOs to participate in the shared savings program beginning in January, 2014.

The newest group of ACOs includes a diverse cross-section of physician practices across the country, CMS officials said in a press release. About half of all Medicare ACOs are physician-led organizations that serve fewer than 10,000 beneficiaries. Approximately 20 percent of these groups include community health centers, rural health centers and critical access hospitals that serve low-income and rural communities.

Included in the 106 new ACO are 15 Advance Payment Model ACOs. These are physician-based or rural providers who would benefit from greater access to capital to invest in staff, electronic health record systems or other infrastructure required to improve care coordination, CMS' release says. Medicare hopes to recoup advance payments over time through future shared savings. Fifteen advanced payment Model ACOs had also been announced during the last round of program contracts.

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