CMS Unveils New ACO Investment Model for Small, Rural Providers
On Wednesday, CMS announced a new model intended to help small and rural providers develop the infrastructure necessary to succeed in Medicare's accountable care organization program, Modern Healthcare reports (Evans, Modern Healthcare, 10/15).
The ACO Investment Model is for organizations participating in the Medicare Shared Savings Program. Through the model, CMS will invest up to $114 million in infrastructure and redesigned care processes at up to 75 MSSP participants. The goal is to increase the number of Medicare beneficiaries who can participate in Medicare ACOs (CMS release, 10/15).
CMS Administrator Marilyn Tavenner said, "The ACO Investment Model will give Medicare Accountable Care Organizations more flexibility in setting quality and financial goals, while giving them greater accountability for delivering quality care efficiently," adding, "We are working with these organizations to make necessary investments that encourage doctors, hospitals and other health care providers to work together to better coordinate care and keep people healthy" (Adams, CQ HealthBeat, 10/15).
According to CMS, the new model is a "pre-paid shared savings" model that will help new ACOs form in underserved areas and existing ACOs move into arrangements that bring more financial risk.
Larry Kocot, a visiting fellow at the Brookings Institution's ACO Learning Network, said that upfront capital investments are a "very real need" for ACOs, especially those that are small and operated by physicians.
Among other things, smaller ACOs often struggle to pay for health IT investments needed for accountable care, according to Kavita Patel, a managing director at Brookings' Engelberg Center for Healthcare Reform (Modern Healthcare, 10/15).
To be eligible for the program, an ACO cannot include a hospital with more than 100 beds (AHA News, 10/15).
The application deadline for the new program will depend on when the ACO entered the MSSP. Specifically:
- ACOs that entered the program in 2012 or 2013 must apply by Dec. 1; and
- ACOs that entered the program in 2014 or later will be able to apply starting next summer (CMS release, 10/15).
Payments
Under the new model, each newly formed ACO will get three types of payments:
- An upfront, fixed payment;
- An upfront payment based on the expected number of assigned beneficiaries; and
- A monthly payment based on the size of the ACO to address the fixed and variable costs of creating a new ACO.
Existing ACOs participating in the new model will receive two types of payments:
- An upfront payment based on the expected number of assigned beneficiaries; and
- A monthly payment based on the size of the ACO.
CMS will recoup the investments in the ACOs through an offset in the ACO's shared savings (CMS factsheet, 10/15).
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