March 14, 2015

With the rollout of a new version of the Medicare Shared Savings Program, CMS addressed many of the criticisms associated with its' Pioneer ACO program. The new model rewards providers at higher levels for taking on more risk and revises benchmarks for cost comparisons. Most importantly, the new model is flexible, allowing ACOs to choose from among four different payment mechanisms for reimbursement. And unlike the Pioneer rollout, the new ACO model offers a 2nd enrollment period in 2016-in addition to this June's first application period.

To date, there are approximately 700 ACOs established with the sponsors of ACOs distributed as follows:

Medicare: 59%
Commercial Insurers: 34%
Hybrid Medicare/Commercial: 7%
Source: http://pharmspective.com/acotracker/

Half of ACOs are physician-led but the greatest growth in ACOs is originating from hospital system and integrated delivery networks. These entities see ACOs as their path to transition away from fee-for-service reimbursement towards performance or value-based provider payments-a critical factor cited by most experts in sustaining the long-term viability of our healthcare system.

ACOs have already driven the transformation of care delivery to a new model that rewards providers based on outcomes. This new refinement by CMS represents an important step in ensuring the fairness and effectiveness of new payment models for providers in our healthcare system.

Contact us at info@pharmspective.com to learn more about our suite of ACO tools and resources and stay on top of the changing healthcare landscape.