The U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced that health care providers have formed 106 new Accountable Care Organizations (ACOs) in Medicare, covering as many as 4 million Medicare beneficiaries. The new ACOs include a practices from 47 states in total, including the Billings Clinic in Montana; Cedars-Sinai Accountable Care in Louisiana; the Marshfield Clinic in Wisconsin; Geisinger Health System in New York and Pennsylvania; and UCLA Health System. About half of all ACOs now are physician-led groups serving fewer than 10,000 beneficiaries, and 20 percent serve rural or low-income areas. Since passage of the Affordable Care Act, more than 250 Accountable Care Organizations have been established. ACOs share with Medicare any savings generated from lowering the growth in health care costs, while meeting standards for quality of care. ACOs must meet quality standards to ensure that savings are achieved through improving care coordination and providing care that is appropriate, safe, and timely. The Centers for Medicare & Medicaid Services (CMS) has established 33 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. Federal savings from this initiative are estimated to be up to $940 million over four years.

The Centers for Medicare & Medicaid Services (CMS) announced that 15 new accountable care organizations (ACOs) were selected to participate under the Center for Medicare and Medicaid Innovation's (CMMI's) Advance Payment ACO Model. This brings the total number of advance payment ACOs to 20. The initiative is designed for smaller physician practices and rural practitioners who would benefit from additional start-up resources while participating in the Medicare Shared Savings Program (MSSP). Each participating ACO will receive advance payments to help establish care coordination for beneficiaries.

The Centers for Medicare and Medicaid Services (CMS) released the much anticipated Accountable Care Organization (ACO) final rule, implementing section 3022 of the Affordable Care Act (ACA), which contains provisions relating to Medicare payments to providers of services and suppliers participating in ACOs under the Medicare Shared Savings Program. The rule on Medicare ACOs relaxes eligibility requirements for doctors and hospitals to participate by halving the number of performance measurements (65 to 33), removing the electronic medical records (EMR) requirement, and eliminating some financial risks. CMS also extended the deadline for ACO applications through 2012. As enticement to rural doctors and physician-owned practices, CMS said it would dedicate $170 million to said providers to start ACOs. Regulators estimate that between 50 and 270 ACOs will be established in the next 3 years, which will affect the care of 4% of Medicare beneficiaries. Multiple federal agencies also released rules and guidance on fraud & abuse and antitrust issues related to ACOs. The HHS Office of Inspector General (OIG) issued an interim final rule (IFR) on the waiver of certain fraud and abuse provisions and the Department of Justice (DOJ) issued a statement on health care antitrust enforcement policies. To read more about ACOs, click here. For the ACO final rule fact sheet, click here.

The Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health and Human Services (HHS) have announced that the Center for Medicare and Medicaid Innovation (Innovation Center) will support a new type of Accountable Care Organization, called the Pioneer ACO Model. This type of ACO is designed to work in conjunction with both public and private payers and is estimated by the Medicare Chief Actuary to save up to $430 million over 3 years because of better care management and coordination. “The Pioneer Model is an opportunity for those organizations that have already adopted significant care coordination processes to move further and faster into seamless, coordinated care by utilizing alternative payment mechanisms,” said Richard Gilfillan, M.D., director of the Innovation Center. CMS will accept applications for Pioneer ACOs through July 18, 2011.