Today, the U.S. Department of Health and Human Service (HHS) named 32 health care organizations that will participate in the Pioneer Accountable Care Organization Model. The goal of the new ACO Model is to encourage providers, hospitals, specialists, and caregivers to provide more coordinated care, which could save $1.1 billion over a five year period, HHS projects. The Centers for Medicare & Medicaid Services (CMS) Innovation Center is spearheading this initiative and will reward groups that have formed ACOs based on improvements in health of their Medicare patients and their ability to lower health care costs. Under the Pioneer ACO Model, the 32 selected health care organizations will test the effectiveness of several innovative payment models. The goal of the Pioneer ACO model is to provide better care for beneficiaries, improved coordination with private payers, a reduction Medicare cost growth, and rewards for health care providers that deliver high-quality care. The 32 selected Pioneer ACOs represent urban and rural organizations from various geographic regions of the country, covering 18 states and 860,000 Medicare beneficiaries.

The Centers for Medicare and Medicaid Services (CMS) released the much anticipated Accountable Care Organization (ACO) final rule, implementing section 3022 of the Affordable Care Act (ACA), which contains provisions relating to Medicare payments to providers of services and suppliers participating in ACOs under the Medicare Shared Savings Program. The rule on Medicare ACOs relaxes eligibility requirements for doctors and hospitals to participate by halving the number of performance measurements (65 to 33), removing the electronic medical records (EMR) requirement, and eliminating some financial risks. CMS also extended the deadline for ACO applications through 2012. As enticement to rural doctors and physician-owned practices, CMS said it would dedicate $170 million to said providers to start ACOs. Regulators estimate that between 50 and 270 ACOs will be established in the next 3 years, which will affect the care of 4% of Medicare beneficiaries. Multiple federal agencies also released rules and guidance on fraud & abuse and antitrust issues related to ACOs. The HHS Office of Inspector General (OIG) issued an interim final rule (IFR) on the waiver of certain fraud and abuse provisions and the Department of Justice (DOJ) issued a statement on health care antitrust enforcement policies. To read more about ACOs, click here. For the ACO final rule fact sheet, click here.

The Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health and Human Services (HHS) have announced that the Center for Medicare and Medicaid Innovation (Innovation Center) will support a new type of Accountable Care Organization, called the Pioneer ACO Model. This type of ACO is designed to work in conjunction with both public and private payers and is estimated by the Medicare Chief Actuary to save up to $430 million over 3 years because of better care management and coordination. “The Pioneer Model is an opportunity for those organizations that have already adopted significant care coordination processes to move further and faster into seamless, coordinated care by utilizing alternative payment mechanisms,” said Richard Gilfillan, M.D., director of the Innovation Center. CMS will accept applications for Pioneer ACOs through July 18, 2011.

The Federal Trade Commission (FTC) will host a workshop on May 9 to gather information on enforcing U.S. antitrust laws as they relate to the formation of Accountable Care Organizations (ACOs). The Department of Justice (DOJ) and the FTC issued a joint policy statement on ACO antitrust enforcement March 31, for which the comment period expires at the end of May.