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2 ACO Experts, 2 Viewpoints, Too Much to Know

Karen Minich-Pourshadi, for HealthLeaders Media, May 31, 2011

If you feel as though just about every week or so something new comes out involving accountable care organizations, you’re not mistaken. The Centers for Medicare & Medicaid Services recently announced two initiatives related to the ACO model: The ACO Pioneer Program and the Advanced Payment Initiative. So, what do these two programs mean for hospitals and health systems? Well that depends on your thoughts on ACOs, and more than a few experts, including the two I spoke with, disagree.

First, the lowdown on the latest programs:

The ACO Pioneer Program: Launching in fall 2011, the ACO Pioneer Program allows 30 organizations, or “Pioneers,” to more rapidly move from a shared savings payment model to a population-based payment model “on a track consistent with, but separate from, the Medicare Shared Savings Program,” according to the CMS Center for Medicare & Medicaid Innovation.

The program is designed to:
  • work in coordination with private payers by aligning provider incentives
  • achieve cost savings for Medicare, employers and patients

For the first two years of the Pioneer program, the payment models being tested are a shared savings payment policy with generally higher levels of shared savings and risk than those currently proposed in the Medicare Shared Savings Program. In the third year of the program, participating ACOs showing specified levels of savings over the first two years will be eligible to move a substantial portion of their payments to a population-based model. 

Advanced Payment Initiative: Also launching in the autumn, the Advanced Payment Initiative offers organizations the opportunity to receive financial assistance to set up an ACO. “Under the proposed initiative, eligible organizations could receive an advance on the shared savings they are expected to earn as a monthly payment for each aligned Medicare beneficiary. ACOs would need to provide a plan for using these funds to build care coordination capabilities, and meet other organizational criteria. [These] advance payments would be recouped through the ACOs’ earned shared savings,” according to the CMS’ Center for Innovation website.

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