CMS Selects New Medicare ACOs

Health Care Law Update

Date: July 10, 2012


On July 9, 2012, Health and Human Services (HHS) Secretary Kathleen Sebelius announced that the Centers for Medicare and Medicaid Services (CMS) has selected 89 additional Accountable Care Organizations (ACOs) to participate in the Medicare Shared Savings Program (MSSP). In total, there now are 154 organizations participating in Medicare shared savings initiatives, serving more than 2.4 million Medicare beneficiaries across the country. The MSSP, which began on January 1, 2012, and other initiatives related to ACOs were made possible by the 2010 Affordable Care Act. Federal savings from the initiatives could amount to as much as $940 million over four years.

ACOs are organizations comprised of hospitals, doctors and/or other health care providers who have agreed to work together to coordinate care for Medicare beneficiaries. ACOs that succeed in reducing the rate of growth in the cost of care while providing high-quality care may share in the savings to Medicare. Studies have shown that better care often costs less, partly because coordinated care helps ensure that patients receive the right care at the right time and partly because it helps reduce unnecessary duplication of services and medical errors. To ensure high-quality care, CMS has established 33 quality measures on which each ACO reports 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. Five of the newly selected ACOs applied for a version of the program that allows them to earn a higher share of any savings by also being held accountable for a share of any losses if the costs of care for the beneficiaries assigned to them increase (a two-sided risk contract). Secretary Sebelius praised the doctors, hospitals, health centers and others for working together to ensure Medicare beneficiaries get better, more patient-centered, coordinated care.

Four of the 89 new ACOs are in Ohio:

  • Mercy Health Select, LLC, in Cincinnati, is comprised of hospitals employing ACO professionals, with 365 physicians.
  • ProMedica Physician Group, Inc., in Toledo, is comprised of ACO group practices and networks of individual ACO practices, with 250 physicians.
  • Summa Accountable Care Organization, in Akron, is comprised of partnerships between hospitals and ACO professionals, with 612 physicians.
  • University Hospitals Coordinated Care, in Shaker Heights, is comprised of partnerships between hospitals and ACO professionals, with 1,770 physicians.

The HHS announcement noted that almost half the ACOs are physician-driven organizations serving fewer than 10,000 beneficiaries, demonstrating that smaller organizations are interested in operating as ACOs.

Beginning this year, ACO applications will be accepted annually. Organizations wishing to participate in the MSSP beginning in January 2013 can submit applications from August 1 through September 6, 2012. More information, including application requirements, is available on the CMS website.