Industry Updates

Building upon experience from the Pioneer ACO Model and the Medicare Shared Savings Program (Shared Savings Program), the Next Generation ACO Model offers a new opportunity in accountable care—one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.

Medicare Accountable Care Organization initiatives to improve how the health system cares for patients

Today, the Centers for Medicare & Medicaid Services (CMS) announced 121 new participants in Medicare Accountable Care Organization (ACO) initiatives designed to improve the care patients receive in the health care system and lower costs. With this announcement, ACOs now represent 49 states and the District of Columbia.

“Americans will get better care and we will spend our health care dollars more wisely because these hospitals and providers have made a commitment to change how they do business and work with patients,” HHS Secretary Sylvia M. Burwell said. “We are moving Medicare and the entire health care system toward paying providers based on the quality, rather than the quantity of care they give patients. The three new ACO initiatives being launched today mark an important step forward in this effort.”

ACOs were created to change the incentives for how medical care is paid for in the U.S., moving away from a system that rewards the quantity of services to one that rewards the quality of health outcomes.

Predictions for 2016

Since Health Reform is the overall driver for many new health care businesses and many new (and needed) health care organizational models, we have made six predictions, prepared some helpful questions to ask, and listed a summary of trends to help you understand that these changes represent opportunities as well as challenges. Let’s look at what the leading issues may be this coming year and going into 2017.

Federal News: Medicare accountable care organizations addressed in CMS final rules

The Centers for Medicare and Medicaid Services (CMS) has expanded medical providers options to work in accountable care organizations (ACOs), to better coordinate patient care, and to deliver high quality, more cost-effective care. A final regulation and a notice is scheduled be published in the November 2 Federal Register.

The Patient Protection and Affordable Care Act (ACA) created ACOs, in which provider participation in an ACO is entirely voluntary. In addition, an interim final rule also to be published on November 2 provides waivers in connection with the Shared Savings Program.

ACOs are part of the traditional Medicare fee-for-service program in which beneficiaries may choose to obtain services from any provider. Whether an ACO is responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization. A provider in an ACO may not require a beneficiary to obtain services from another provider or supplier in the same ACO.

Health Affairs offers an updated bibliography of reliable research and surveys of the ACO industry

It’s too soon to fully gauge the effectiveness of ACOs or patient-centered medical homes, but no one can say that they aren’t off and running. Nine articles offer early insights on ACO and patient-centered medical home care delivery models, both of which have made significant headway in a relatively short period of time. ACOs, in particular, have seen considerable momentum—from a standing start just two years ago, to more than 300 ACOs now operating in forty-eight states.

The goal of both models is to more tightly coordinate care and improve the health of patients, but no one is sure whether either model will deliver major cost savings, especially right away. Articles include the following:

Accountable Care Organizations May Have Difficulty Avoiding the Failures of Integrated Care Networks of the 1990s, by Lawton Burns and Mark Pauly of the Wharton School of the University of Pennsylvania.