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Accountable Care Organizations Program Models

The Supreme Court’s decision upholding the Affordable Care Act supports The Centers for Medicare and Medicaid Services (CMS) different programs for the development of Accountable Care Organizations (ACOs).  In Kentucky, we are beginning to see these organizations emerge in different models.

New regulations and programs have opened the door for the development of the relationships necessary for ACOs, including relationships that do not have to be employment based, as the four ACO participants from Kentucky demonstrate. The different ACO programs are described in the following:

  • Medicare Shared Savings Program

The Medicare Shared Savings Program allows providers who voluntarily agree to work together to coordinate care for patients and who meet certain quality standards to share in any savings they achieve for the Medicare program.  ACOs which elect to become accountable for shared losses have the opportunity to share in greater savings.  ACOs will coordinate and integrate Medicare services, with success being gauged by roughly 30 quality measures, organized in four domains. These domains include patient experience, care coordination and patient safety, preventive health and at-risk populations. The higher the quality of care providers deliver, the more shared savings their ACO may earn, provided they also lower growth in health care expenditures.

  • Advance Payment Accountable Care Organization Model

The Advanced Payment Model provides additional support to physician-owned and rural providers participating in the Medicare Shared Savings Program who would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems. The advance payments would be recovered from shared savings achieved by the ACO.

  • Pioneer Accountable Care Organization Model

The Pioneer model is an initiative complementary to the Medicare Shared Savings Program designed for organizations with experience providing integrated care across settings. The Pioneer Model tests a rapid transition to a population-based model of care, and engages other payers in moving toward outcomes-based contracts.  CMS has announced 32 Pioneer ACOs, none in Kentucky.  CMS estimates that care coordination between hospitals, physicians and other caregivers under the Pioneer ACO model could save Medicare up to $1.1 billion. The Pioneer ACO Model is designed to support organizations with experience operating as ACOs or in similar arrangements, in providing more coordinated care to beneficiaries at a lower cost to Medicare.  The Pioneer ACO Model is also designed to support organizations with a new payment model, allowing them to provide more coordinated care to beneficiaries at a lower cost to Medicare.  The Pioneer ACO Model will test the impact of different payment arrangements in helping these organizations achieve the goals of providing better care to patients, and reducing Medicare costs.

With four approved ACOs, Kentucky physicians and hospitals have the ability to file applications for participation in these programs for 2013, but must do so quickly as the deadlines are approaching.

Lisa English Hinkle

Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at lhinkle@mmlk.com or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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