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From Health Law Daily, November 6, 2015

ACO number cut in half after two more systems quit, look to New Generation

By Melissa Mitchell, J.D.

The number of accountable care organizations (ACOs) is now down to half the number of systems that were participating when the Pioneer ACO initiative, which is supported by the Medicare Shared Savings Program (MSSP), first began. Two Massachusetts health care systems, Steward Health Care System and Mount Auburn Cambridge Independent Practice Association, recently announced their withdrawal from the program, which began with 32 practices in 2012. Both systems, however, reported that they would be joining the Next Generation ACO model, which is scheduled to roll out next year.

ACOs. According to CMS, the MSSP ACOs, which are collections of providers that coordinate care in order to increase quality and decrease costs, serve beneficiaries receiving care through Medicare fee-for-service models in 49 of the 50 states, plus the District of Columbia and Puerto Rico. A searchable list of ACOs across the nation is available on the CMS ACO directory. In 2012, the Pioneer ACO program began with 32 participating provider systems. While CMS has not officially reported the number of remaining ACOs, sources note the at least 16 have left the program as of November 6, 2015. The MSSP was established under section 3022 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

Recent drop outs. The Boston Globe reported that Steward and Mount Auburn both cited financial reasons for leaving the program. Although Mount Auburn has realized savings of upwards of $14 million since joining the ACO initiative, representatives from that system told the Globe that they predicted "it would lose money under new rules that reduced the budget it would have received to care for patients." Further, in a press release issued in August of 2015, the Steward system reported "$30 million in savings" over three years, while still maintaining "strict quality standards."

Next Generation. Both Mount Auburn and Steward indicated that they were quitting the current program in hopes of joining the Next Generation ACO model, which they hoped would provide for more favorable rules leading to more profitability for the systems. The new model will be put in place with different rules that are meant to allow provider groups to assume higher levels of financial risk and, in turn, the possibility of higher financial rewards, as it will focus on: (1) protecting beneficiaries freedom in choosing providers; (2) providing enhancements to benefits; (3) creating a financial model that is more sustainable; (4) using an established benchmark; and (5) improving cash flow through the use of alternative payment mechanisms (see Next Generation ACOs one step closer to value-based care, March 11, 2015 and Consumer advocates encourage increased beneficiary engagement in Next Generation initiativeMay 21, 2015).

Companies: Mount Auburn Cambridge Independent Practice Association; Steward Health Care System; Boston Globe

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