U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced yesterday that as of July 1, 2012, 89 new Accountable Care Organizations (ACOs) began serving 1.2 million people with Medicare in 40 states and Washington, D.C. ACOs are organizations formed by groups of doctors and other health care providers that have agreed to work together to coordinate care for people with Medicare. These 89 new ACOs have entered into agreements with CMS, taking responsibility for the quality of care they provide to people with Medicare in return for the opportunity to share in savings realized through high-quality, well-coordinated care. Federal savings from this initiative are estimated to be up to $940 million over four years. The 89 ACOs announced today bring the total number of organizations participating in Medicare shared savings initiatives to 154, including the 32 ACOs participating in the testing of the Pioneer ACO Model by CMS’s Center for Medicare and Medicaid Innovation (Innovation Center) announced last December, and six Physician Group Practice Transition Demonstration organizations that started in January 2011. For 2012, CMS has established 33 quality measures 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.

The Centers for Medicare and Medicaid Services (CMS) have issued a notice of proposed rulemaking (NRPM) on Accountable Care Organizations (ACO). The proposed rule implements Section 3022 of the Affordable Care Act (ACA), which establishes certified ACOs as formal Medicare providers under the Medicare Shared Savings Program.