Accountable Care Organizations: CMS Announces Second Round Medicare Shared Savings Approved Organizations

The Centers for Medicare and Medicaid Services (CMS) announced the selection of the first 27 Accountable Care Organizations (ACOs) to participate in the Medicare Shared Saving Program (Shared Savings Program). The selected ACOs include more than 10,000 physicians, 10 hospitals and 13 smaller physician-driven organizations in urban and rural areas.  CMS is currently reviewing more than 150 applications from ACOs that are seeking to participate in the Shared Savings Program beginning July 1, of which over 50 are applying for the Advance Payment ACO Model. 

Of these 27 ACOs, 5 are participating in the Advance Payment ACO Model. This Model was established by the CMS Innovation Center to encourage rural and physician-based ACOs to participate in the Shared Savings Program. The Advance Payment ACOs receive advance payments to help cover the costs of establishing the infrastructure needed to coordinate care for the beneficiaries they serve.  CMS is reviewing more than 50 applications for Advance Payments that start in July. 

The 27 Medicare ACOs through the Shared Savings Program will serve an estimated 375,000 beneficiaries in 18 states. Coupled with the 32 Pioneer ACOs and six Physician Group Practice Transition Demonstration organizations that both started in January, the total 65 ACOs will serve 1.1 million Medicare beneficiaries, CMS said in a statement. 

Those ACOs that succeed in providing high quality care – as measured by performance on 33 quality measures – while reducing the costs of care may share in the savings to Medicare.  Two of the ACOs announced today applied for a version of the program that allows them to earn a higher share of any savings, in return for which they have agreed to be held accountable for a share of any losses if the costs of care for the beneficiaries assigned to them increase.  Participation in an ACO is purely voluntary for providers, and people with Medicare retain their ability to seek treatment from any provider they wish.  The 27 ACOs include: 

Northeast (11)

• Accountable Care Coalition of Mount Kisco, LLC – Mount Kisco, N.Y.
• Accountable Care Coalition of the North Country, LLC – Canton, N.Y.
• AHS ACO, LLC – Morristown, N.J. (Serving beneficiaries in New Jersey and Pennsylvania)
• Chinese Community Accountable Care Organization – New York City
• CIPA Western New York IPA, doing business as Catholic Medical Partners – Buffalo, N.Y.
• Crystal Run Healthcare ACO, LLC – Middletown, N.Y. (Serving beneficiaries in New York and Pennsylvania)
• Hackensack Physician-Hospital Alliance ACO, LLC – Hackensack, N.J. (Serving beneficiaries in New Jersey and New York)
• Jordan Community ACO – Plymouth, Mass.
• North Country ACO – Littleton, N.H. (Serving beneficiaries in New Hampshire and Vermont) 
• Optimus Healthcare Partners, LLC – Summit, N.J.
• Physicians of Cape Cod ACO Description of Organization – Hyannis, Mass.

South (12)

• Accountable Care Coalition of Caldwell County, LLC – Lenoir, N.C.
• Accountable Care Coalition of Coastal Georgia – Ormond, Fla. (Serving beneficiaries in Georgia and South Carolina)      
• Accountable Care Coalition of Eastern North Carolina, LLC – New Bern, N.C.
• Accountable Care Coalition of Greater Athens Georgia – Athens, Ga.
• Accountable Care Coalition of the Mississippi Gulf Coast, LLC – Clearwater, Fla. (Serving beneficiaries in the Mississippi Gulf Coast area)   
• Accountable Care Coalition of Texas, Inc. – Houston, Texas
• Coastal Carolina Quality Care, Inc.  – New Bern, N.C.
• Florida Physicians Trust, LLC – Winter Park, Fla.
• Jackson Purchase Medical Associates, PSC – Paducah, Ky.
• Primary Partners, LLC – Clermont, Fla.
• RGV ACO Health Providers, LLC – Donna, Texas
• West Florida ACO, LLC – Trinity, Fla. 

West (3)

• AppleCare Medical ACO, LLC – Buena Park, Calif.
• Arizona Connected Care, LLC – Tucson, Ariz.
• Premier ACO Physician Network – Lakewood, Calif. 

Midwest (1)

• Accountable Care Coalition of Southeast Wisconsin, LLC – Milwaukee, Wis.       

Background on the Shared Savings Program: 

Section 3022 of the Affordable Care Act added a new section 1899 to the Social Security Act that requires the Secretary to establish the Shared Savings Program.  The program is intended to encourage providers of Medicare-covered services and supplies (e.g., physicians, hospitals and others involved in patient care) to create a new type of health care entity, an ACO, that agrees to be held accountable for improving the health and experience of care for individuals and improving the health of populations while reducing the rate of growth in health care spending.  Studies have shown that better care often costs less, because coordinated care helps to ensure that the patient receives the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors.  

On Nov. 2, 2011, CMS published a final rule in the Federal Register establishing the Shared Savings Program.  The final rule addressed issues relating to eligibility, governance, beneficiary rights, quality measures and performance scoring, and CMS monitoring of the ACO operations.  At the same time, the Innovation Center announced an Advance Payment ACO Model to test whether providing advance payments from anticipated savings could encourage certain rural and physician-based entities to apply to participate in the program, thereby increasing the amount and speed at which ACOs can improve care for beneficiaries and generate Medicare savings.

In conjunction with the final rule, the Department of Health and Human Services Office of Inspector General, the Department of Justice, the Federal Trade Commission, and the Internal Revenue Service issued separate notices addressing a variety of legal issues as they applied to the Shared Savings Program.  These included the interaction of the Shared Savings Program with the federal anti-kickback, physician self-referral, civil monetary penalty (the fraud and abuse laws) and antitrust laws, as well as the Internal Revenue Code regarding the tax implications for nonprofit entities seeking to participate in ACOs.  The final rule, the notice of the Advance Payment ACO Model, and the regulatory guidance on fraud and abuse were published in the Nov. 2, 2011 Federal Register. 

The final rules offered ACOs the option for the first year of the program of starting on either April 1 or July 1, 2012.  CMS will announce the date for submission of applications to participate in the Shared Savings Program beginning in 2013 later this year.