An accountable care organization (ACO) is a Medicare shared savings program that promotes accountability for a patient population, coordinates items and services under Medicare parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient services. In early July 2012 the United States Department of Health and Human Services (HHS) announced the approval of 89 new ACOs, joining the 27 previously approved ACOs participating in the Medicare shared savings program. The new ACOs did not include those already participating in the Pioneer ACO Model or the Physician Group Practice Transition Demonstration.
The statutory authority for ACOs is set forth in 42 U.S.C. § 1395jjj: “Not later than January 1, 2012, the Secretary shall establish a shared savings program (in this section referred to as the ‘‘program’’) that promotes accountability for a patient population and coordinates items and services under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.”
While forming an ACO involves substantial time and financial commitments, the process is clear:
- File a Notice of Intent (closed for the 2013 program, but information about subsequent years will be forthcoming)
- Get a User ID (also closed for 2013) from the Centers for Medicare & Medicaid Services (CMS)
- Submit the ACO Application
- Wait for CMS to approve or deny the application (the next round of decisions will be released in the Fall 2012)
In preparing the ACO Application, the CMS Website has some useful information, including:
- Data to calculate your primary service areas
- ACO quality measures information
- Data Use Agreement form
- ACO Agreement template
- Electronic Funds Transfer Authorization Agreement
Additional information appears on the CMS Website, click here.
Advance Payment ACOs
The Advance Payment Model for accountable care organizations (ACO) focuses on physician-based, rural providers and critical access hospitals who form a Medicare shared savings program. Through the Advance Payment Model, selected ACOs will receive advanced monthly payments which in turn can be used to invest and expand the ACO infrastructure.
The Centers for Medicare & Medicaid Services (CMS), Center for Medicare & Medicaid Innovation, recently approved fifteen additional Advance Payment Model ACOs, joining the other five approved in April.
ACOs approved through for the Advance Payment Model can receive an advance on their anticipated shared savings in the form of three types of payments:
- An upfront, fixed payment: Each ACO will receive a fixed payment.
- An upfront, variable payment: Each ACO will receive a payment based on the number of its historically-assigned beneficiaries.
- A monthly payment of varying amount depending on the size of the ACO: Each ACO will receive a monthly payment based on the number of its historically-assigned beneficiaries.