The loans target accountable care organizations that serve rural and underserved communities and which joined the Shared Savings Program in 2012, 2013, or 2014. ACOs joining in 2016 are also eligible.
The federal government is offering to loan up to $114 million to 75 accountable care organizations serving Medicare beneficiaries in rural and underserved areas to help cover the upfront costs of redesigning care processes and building IT infrastructure.
"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," said Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services, in prepared remarks.
"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."
Administered through the CMS Innovation Center, loan eligibility targets ACOs that joined the Shared Savings Program in 2012, 2013, or 2014, and new ACOs joining the Shared Savings Program in 2016.
ACOs that will begin participating in the Medicare Shared Savings Program on Jan. 1, 2016 will receive three types of payments; an upfront, fixed payment; an upfront, variable payment, where each ACO receives a payment based on the number of its preliminarily prospectively-assigned beneficiaries; and a varying monthly payment that is based on the number of its preliminarily prospectively-assigned beneficiaries.
ACOs that joined the Shared Savings Program from 2012–2014 will not be eligible for the upfront fixed payment. CMS said it will recover the loan money by paying reduced shared-savings bonuses to ACOs that take out the loans.
The application deadline for ACOs that started in the Shared Savings Program in 2012 or 2013 will be Dec. 1, 2014. Applications will be available in mid-2015 for ACOs that started in the Shared Savings Program in 2014 or will start in 2016.
Joleen Huneke, executive director the South East Rural Physician Alliance based in Crete, NE, says she still reading the fine print on the CMS offer.
"We already were an advanced payment. Are they going to let us go after this money again or are they going to say 'no you already had yours. You don't get any more.'" Huneke says. "That is the biggest problem. It's when their rules hit their rules."
SERPA began participating in the Shared Savings Program and the Medicaid ACO now covers more than 10,000 beneficiaries. Huneke says additional funding would be welcomed.
"The cost of setting up an ACO is expensive," she says. "We are doing a patient-centered medical home in our ACO. That is very expensive. We have all independent physicians who all own their own practices. Any money they spend on patient centered medical homes and that infrastructure is out of their own pockets."
Clinton MacKinney, MD, deputy director of the RUPRI Center for Rural Health Policy Analysis at the University of Iowa, says rural ACOs face a steeper climb than their urban counterparts.
"There are various marketing requirements and notifications requirements that are all time consuming and expensive. So, just by sheer size rural organizations may not have the resources to develop that infrastructure," he says.
"Rural organizations also may not have the same experience in managed care that urban organizations have. Just to develop the processes to do what are required of ACOs would be somewhat new and different, again more challenging and more costly."
"Another big factor is the attribution numbers. A Medicare ACO requires 5,000 individuals to participate. That means 5,000 individuals that truly demonstrated that they seek out your organization or providers for their primary care. It's difficult, especially in places where people travel for the winter," he says.
Asked if the $114 million made available from CMS was big enough to make a difference, MacKinney said: "The answer is it's never enough. But I am encouraged that CMS is recognizing that 25% of the population of this country that lives in rural [communities] should not be left behind. This is a step in the right direction."
"All of us advocating for rural health would say insufficient attention has been paid to 25% of the population. We do not see a great preponderance of demonstrations that are applicable to rural areas. There needs to be more."
John Commins is the news editor for HealthLeaders.