Dec. 23—A leading cost-control and quality improvement initiative in the federal healthcare overhaul will expand next year, federal officials announced.

Medicare plans to launch 123 more accountable care organizations (ACOs) in 2014, according to the U.S. Department of Health and Human Services. The clinical and financial alliances of providers were authorized by the Affordable Care Act (ACA) as a way to improve care coordination and clinical outcomes. The different types of ACOs created by HHS allow providers to share savings they derive from improved care. ACO participants also agree to face penalties for not improving care.

The newest ACOs, which will bring the total of such organizations to more than 360, will provide care to about 1.5 million Medicare beneficiaries. The expansion will increase total ACO enrollments to 5.3 million Medicare beneficiaries, although beneficiaries can opt of out of the program.

“This is a great example of the Affordable Care Act rewarding hospitals and doctors that work together to help our beneficiaries get the best possible care,” HHS Secretary Kathleen Sebelius said in a release.

The Centers for Medicare & Medicaid Services (CMS) evaluates ACO quality performance using 33 quality measures on patient and caregiver experience of care, care coordination and patient safety, appropriate use of preventive health services, and improved care for at-risk populations.

Addressing Concerns

In announcing the latest ACOs, HHS officials emphasized that more than half of them are physician-led organizations that serve fewer than 10,000 beneficiaries. Critics have raised concerns that many ACOs are led by hospitals or the largest physician groups. In response to other criticism from rural providers that the ACO designs deter their participation, HHS officials said about 20 percent of ACOs include community health centers, rural health clinics, and critical access hospitals.

The administration has linked ACA savings initiatives such as the ACO program to a slowdown in Medicare spending growth in recent years.

The first results of the aggressive Pioneer ACO program earlier this year indicated mixed results. All 32 Pioneers improved their care quality and performed better than fee-for-service Medicare in 15 quality measures tracked by CMS, and they generated a gross savings of $87.6 million in 2012. However, nearly one-third of the 32 providers dropped out of the program because they didn’t save enough money, and seven of them moved to a less-risky version of the ACO.

A February 2013 report from Oliver Wyman found most ACO providers are moving their non-Medicare patients into similar types of arrangements, resulting in the enrollment of up to 43 million people in either a Medicare or private insurance ACO.

Publication Date: Monday, December 23, 2013