CMS Announces First 27 Participants in Medicare Shared Savings Program

On Tuesday, CMS announced that it has selected 27 health organizations to become accountable care organizations under the federal health reform law's Medicare Shared Savings Program, Modern Healthcare reports (Daly, Modern Healthcare, 4/10).

California-Based ACOs

Two of the 27 new ACOs are based in California:

  • AppleCare Medical ACO, from Buena Park; and
  • Premier ACO Physician Network, from Lakewood (Gold/Torres, Kaiser Health News, 4/10).

Three ACO Programs

The announcement comes after CMS in January launched the Pioneer Accountable Care Organization program that created 32 new ACOs, and the Physician Group Practice Transition Demonstration, which created six new ACOs (Modern Healthcare, 4/10).

In total, the 65 new ACOs in the three programs will provide care for 1.1 million Medicare beneficiaries.

New Participants

The 27 new ACOs include more than 10,000 physicians, 10 hospitals and 13 smaller, physician-led organizations, which will serve about 375,000 Medicare beneficiaries in 18 states (Cheung, FierceHealthcare, 4/10).

Jonathan Blum, director of the Center for Medicare at CMS, said that many of the new ACOs are working with private insurers to treat non-Medicare beneficiaries (Kaiser Health News, 4/10).

More than 50% of the 27 organizations selected on Tuesday are physician-led, countering concerns from some observers that only "hospital-dominated systems" would participate, according to Blum.

Five of the 27 organizations are participating in an advance-payment program, which provides funding based on expected savings to help rural and physician-based ACOs launch (Modern Healthcare, 4/10). The agency said it is reviewing an additional 150 applications from groups seeking to join the program in July (Reichard, CQ HealthBeat, 4/10).

Jacob Kuriyan
Providers must be told what CMS means by "savings". When more tests and office visits are part of any preventive care program, costs are going to be higher, as Prof. Russell (Rutgers) and others have asserted. Clearly the treatment costs will rise and there will be no savings. Providers who acceot such contracts will find, like the earlier PGP "shared savings" programs that didn't work, that the catch is in the definition of "baseline" costs used to calculate savings. These are estimates anyway, so why not ask for these baseline estimates before an agreement is signed. That'll be fair to the providers.

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