Providers don't shy away from Medicare Shared Savings

Reports of disinterest in the Medicare Shared Savings program have been greatly exaggerated. Despite the healthcare reform law's cloudy future, many physicians, clinics and hospital systems have taken a shine to accountable care.

Sure, big names (and proto-ACOs) like Intermountain Healthcare, the Mayo Clinic and the Cleveland Clinic won't participate. But the initial round of Medicare ACOs is a diverse group, with many organizations from regions not known as accountable care hotbeds. Physicians will lead more than half of the new ACOS, a sign that they recognize fee-for-service's days could be numbered.

The April 10 announcement of 27 ACOs chosen for the Shared Savings program came after the 32 Pioneer ACOs were announced in December 2011. CMS still has 150 applications for ACOS that could join the program later in 2012. With applications pouring in, the only real lag is in patient volume. Expected to eventually cover 5 million beneficiaries, the newly approved ACOs barely make a dent in that figure, serving only 375,000 seniors.

Most ACOs in this group will serve smaller populations; 13 will serve between 5,000 and 10,000 beneficiaries each. They will test whether those populations are large enough to realize savings and improve beneficiary health. The largest, the Accountable Care Coalition of Texas, will serve up to 70,000 beneficiaries in the Houston/Beaumont area. Besides the Houston/Beaumont one, only Catholic Medical Partners (Buffalo) and the Atlantic ACO (New Jersey) will serve 30,000 or more members.

Pioneer ACOs already encompass high levels of integrated care and are in regions where such care dominates (California, Massachusetts, and Wisconsin, among others). By contrast, this round of ACO awards went to Littleton, N.H. (North Country ACO) and Paducah, Ky. (Jackson Purchase Medical Associates). In South Texas, the RGV ACO will implement medical homes for 6,000 Hidalgo County beneficiaries. Hidalgo County, home to most of the communities RGV ACO will serve, also includes McAllen, the town singled out for unusually high Medicare costs in an infamous 2009 New Yorker article.

The new ACOs also include the Chinese Community ACO, a New York City-based organization that will coordinate care for 12,000 beneficiaries. Four NYC hospitals will be part of a network serving beneficiaries with consideration to their ethnicity and culture. ACOs manage populations, not individuals, so the Chinese Community ACO fits the model. Strong costs savings and improved health outcomes could lead future ACO to target coordinated care for other ethnic groups.

ACOs dynamics will change over time. Although five of the 27 Medicare ACOs chose to be part of the Advanced Payment Model, which allows them to receive upfront funding to build their care coordination infrastructure, more than 50 outstanding applicants plan to seek that model.

Even though it could be two months before the country knows the outcome of the U.S. Supreme Court ruling on healthcare reform, providers believe the ACO program may survive either way the court rules. As such, new Medicare ACOs have shown little hesitation in embracing the concept.