CMS announces new ACO model, considers advance payments to attract physicians

posted 05.24.11

Last week, the Centers for Medicare and Medicaid Services announced two changes to the draft regulations for Accountable Care Organizations.

First is the addition of the “Pioneer ACO Model” to the Medicare Shared Savings Program for established organizations that already coordinate care for patients across care settings. After two years under the shared savings payment model (with generally higher levels of shared savings and risk), groups that show a specified level of savings can move to a population-based payment model that brings in private payers and can be tailored to specific organizational and market conditions. The Center for Medicare and Medicaid Innovation is currently requesting applications for the new model.

Second, in response to physicians’ concerns about high startup costs of forming an ACO and to attract more physician-led ACOs, CMS is considering an “Advance Payment Initiative” that would give certain organizations participating in the Medicare Shared Savings Program a part of their shared savings up front. This could remove a large barrier and give physicians the capital to make necessary investments in infrastructure and staff.

“Under the proposed initiative, eligible organizations could receive an advance on the shared savings they are expected to earn as a monthly payment for each aligned Medicare beneficiary,” according to the Innovation Center website. “ACOs would need to provide a plan for using these funds to build care coordination capabilities, and meet other organizational criteria. Advance payments would be recouped through the ACOs’ earned shared savings.”

The Innovation Center will accept comments through June 17, 2011. Send them to advpayACO@cms.hhs.gov.

For more information on both changes, go to the Innovation Center’s website, http://innovations.cms.gov.