HHS: 89 ACOs Start Up

The U.S. Department of Health and Human Services (HHS) says it has accepted 89 more organizations into a Medicare “accountable care organization” (ACO) program July 1.

The Centers for Medicare & Medicaid Services (CMS), an arm of HHS, earlier recruited 32 ACOs for another Medicare ACO program, the Pioneer ACO Model program, and it has signed six physician group practices up for a related, physician group practice transition demonstration program.

HHS now has a total of 154 organizations in voluntary ACO programs and related voluntary Medicare “shared savings” programs.

About 2.4 million Medicare enrollees, or 4.9% of all Medicare enrollees, are in shared savings programs, officials say.

The traditional Medicare program has been paying physicians on a fee-for-service basis, and it must work with all physicians willing to accept its rates and abide by program rules.

Policymakers have argued that the traditional payment approach encourages physicians, hospitals and other care providers to give patients too much care and gives the providers no incentive to work together to improve the quality of care or reduce the cost of care.

The Patient Protection and Affordable Care Act of 2010 (PPACA) included provisions creating the Medicare ACO test programs and the physician group practice program.

The ACO programs are supposed to give each participating group of physicians, clinics and hospitals and incentive to work together by basing some of the group’s reimbursement on the performance of the group as a whole. Officials are hoping they can move toward paying for care for a whole patient each year, rather than paying for care one service at a time.

“Better coordinated care is good for patients, and it saves money,” HHS Secretary Kathleen Sebelius said in a statement about the 89 newly designated ACOs.