- This week, the Centers for Medicare & Medicaid Services (CMS) announced the availability of a new initiative for Accountable Care Organizations (ACOs) that are participating in the Medicare Shared Savings Program. The goal is to create better care coordination nationwide.
ACOs are made possible because of the Affordable Care Act and encourage quality improvement and care coordinated through the use of health information technology. They favor quality over quantity and prevention over treating.
The new investment model is designed to spur efforts to better coordinate care to rural and underserved areas. It was created in response to concerns and available research suggesting that some providers lack adequate access to the capital required to invest in infrastructure necessary to successfully implement population care management.
This will happen by providing up to $114 million in upfront investments to up to 75 ACOs across the country. The initiative provides these investments in three kinds of payments: (1) upfront and fixed, (2) upfront and variable based on the number of preliminarily prospectively-assignment beneficiaries or (3) a monthly payment of varying amount depending on the size of the ACO.
Through this, the number of beneficiaries that take advantage of lower costs and improve health care will increase, regardless of geographic location. CMS will recover these payments through an offset of an ACO’s earned shared savings.
“The ACO Investment Model will give Medicare Accountable Care Organizations more flexibility in setting quality and financial goals, while giving them greater accountability for delivering quality care efficiently,” CMS Administrator Marilyn Tavenner, said in a press release. “We are working with these organizations to make necessary investments that encourage doctors, hospitals and other health care providers to work together to better coordinate care and keep people healthy.”
The Innovation Center was also created by the ACA to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care. Its goal is to transform the Medicare, Medicaid and CHIP programs and is expected to help deliver better care for individuals, better health for populations and lower growth expenditures.
Working with the Shared Savings Program, the Innovation Center is testing the ACO investment model and the Pioneer ACO Model, and has sponsored various activities to help providers form ACOs and improve the results.
Recently,organizations in the Pioneer ACO model and the Medicare Shared Savings Program generated more than $372 million in total program savings for Medicare ACOs while also improving the quality care delivered to Medicare beneficiaries.
Eligible ACOs will have joined the Shared Savings Program at some point since 2012. The application deadline for organizations that started in 2012 or 2013 is December 1, 2014. For any company that started after that, applications will be available in Summer 2015.