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On December 19, 2011, the U.S. Department of Health and Human Services (HHS) announced that the federal agency has approved 32 organizations to become Pioneer Accountable Care Organizations.
Through the Patient Protection and Affordable Care Act (PPACA), the federal government has promised to deliver improved health care while attempting to better control future costs. Among other initiatives, the new health care reform law authorizes the creation of Accountable Care Organizations (ACOs).
Pioneer ACO Initiative
The ACO concept is aimed at existing hospital physician organizations that possess sufficient integration to coordinate the health care of a defined Medicare population. The HHS press release elaborates:
The initiative will test the effectiveness of several innovative payment models and how they can help experienced organizations to provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth. These payment models will allow organizations that are successful in achieving better care and lower cost growth to move away from a payment system based on volume under the fee-for-service model, towards one where the ACO is paid based on the value of care it provides.
The Pioneer ACO model requires ACOs to engage other payers in similar efforts to reward health care providers that deliver high-quality care. The Pioneer ACO model also includes strict beneficiary protections, including the ability for patients to seek care from any Medicare provider they wish.
After a false start earlier this year, the Pioneer ACOs are the first wave of ACOs that have been approved by HHS. The HHS press announcement states, “The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.”
BenefitMall has tracked and discussed the ACO concept in several blogs and legislative alerts over the past year.
Despite good intentions, the initial interim rules for ACOs, issued by HHS on April 7, 2011, contained inadequate financial incentives and failed to generate any positive interest in the target hospital physician groups. HHS received feedback on the initial rules and issued revised interim final ACO rules in November that appear to have cured the problem. As a result, ACOs now are garnering significant interest among health care providers.
The Centers for Medicare and Medicaid Services (CMS) offer an informative website that explains its concept of accountable care organizations (ACOs). The goal of each ACO is to create a single, organized entity that will assume the responsibility for a defined population of Medicare enrollees from highly integrated groups of physicians, hospitals, and ancillary providers. By creating a single health information system with consolidated health records and medical claims programs, patients will benefit from increased efficiency of providers and the elimination of duplicate services.
The Pioneer ACOs offer an opportunity to significantly impact the quality and future cost of health care. Brokers should monitor the ACO movement to assess what opportunities exist to improve health insurance options in the future for their clients.
BenefitMall will continue to keep you apprised of the latest developments as health care reform continues to evolve. For blog posts, legislative alerts, pools, surveys and other resources, visit www.HealthcareExchange.com or www.benefitmall.com.
Vice President of Government and Carrier Relations
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