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CMS Provides $114M Boost to Accountable Care Organizations

By Jennifer Bresnick

- Accountable care organizations (ACO) in rural areas will be among the first in line to share up to $114 million from the new ACO Investment Model, according to a CMS announcement, as part of an ongoing effort to improve care coordination, reduce wasteful spending, and focus on bringing population health management and preventative  care to patients.  As ACOs continue to prove that they can successfully cut costs and improve care quality, CMS is hoping that the model will spread to more patients in challenging care situations with the additional federal funding.

“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 CMS Administrator Marilyn Tavenner. “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.”

Up to 75 organizations will share in the money, and ACOs serving rural areas will receive higher priority than other organizations during the selection process for the funding, CMS says in an accompanying fact sheet.  In order to be eligible for the awards, ACOs must already be participants in the Medicare Shared Savings Program (MSSP) and cannot be owned or operated by a health plan.  ACOs that started MSSP participation in 2012 or 2013 can apply for funding between October 15 and December 1, but newer organizations will need to wait until next summer for their turn to vie for a grant.

“Through the CMS Innovation Center, this initiative will provide up front investments in infrastructure and redesigned care process to help eligible ACOs continue to provide higher quality care,” the CMS press release says. “This will help increase the number of beneficiaries – regardless of geographic location – that can benefit from lower costs and improved health care through Medicare ACOs. CMS will recover these payments through an offset of an ACO’s earned shared savings.”

Accountable care strategies have been identified as one of the major reasons why Medicare will be able to continue to pay hospitals out of its Part A trust for four years longer than previously estimated.  Annual spending has slowed due to the ongoing shift to pay-for-performance reimbursements underpinned by a data-driven health IT infrastructure.  The model has become so popular that up to 130 million patients will be covered under an ACO by 2017.

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