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Medicare’s Accountable Care Organization initiatives achieve savings and high quality care

January 30, 2014

Medicare’s Accountable Care Organization initiatives achieve savings and high quality care

Accountable Care Organizations share in savings

Today, the Centers for Medicare & Medicaid Services (CMS) released interim financial results for the Medicare Shared Savings Program Accountable Care Organizations (ACOs) and Advance Payment ACOs, as well as preliminary evaluation results for the Pioneer ACOs and final results from the Physician Group Practice Demonstration initiatives. 

According to today’s findings, Medicare ACOs that shared in savings under the Shared Savings Program generated shared savings totaling $128 million for the Medicare trust fund.  Of the 114 ACOs that started program operations in 2012, 54 ACOs had lower expenditures than projected, and 29 will share interim savings totaling more than $126 million – a strong start this early in the program.   Initial results from the independent evaluation of the Pioneer ACO Model, the ACO model designed for more experienced organizations prepared to take on greater financial risk, shows that Pioneer ACOs have saved $155 million while continuing to deliver high quality care.  More than 25,000 physicians earned incentives by working with their ACO to successfully report quality measures. This positive news regarding the Medicare ACOs combined with a continuing decline in the latest Medicare hospital readmission data demonstrates that Medicare delivery system reform efforts are gaining momentum and moving in the right direction. 

“These innovative programs are showing encouraging results in delivering high quality, lower cost health care, while providing valuable lessons as we strive to improve our nation’s health care delivery system,” said Health and Human Services Secretary Kathleen Sebelius.

Today’s findings demonstrate that ACOs of various sizes and organizational structures located across the country can deliver high quality care while reducing expenditure growth.

The Medicare Shared Savings Program was created to facilitate coordination and cooperation among providers to improve the quality of care for Medicare fee-for-service beneficiaries and reduce the growth in costs. ACOs share with Medicare any savings generated from lowering the growth in health care costs while meeting standards for high quality care.  Final performance year 1 results will be released later this year, but the early results are promising.

Heartland Regional Medical Center is one of the ACOs that is eligible to share in savings. 

“As an organization we focus on the triple aim of high quality, low cost, and the patient experience,” said Mark Laney, MD, president and CEO of Heartland Health and Mosaic Life Care. “For more than 10 years, we successfully applied the accountable care model to our own employees ­­-- long before becoming an ACO under the CMS Shared Savings Program. We believed we had the right focus, the right tools and the right knowledge. This success proves that we are on the right track.” 

Heartland Regional Medical Center will receive a $2.86 million payment from CMS as their portion of shared savings.   

To learn more about the Medicare Shared Savings Program visit: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/index.html?redirect=/sharedsavingsprogram/.