CMS Announces First Participants In Medicare Shared Savings Program

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By Nathaniel Weixel  

The Centers for Medicare & Medicaid Services April 10 announced that 27 accountable care organizations (ACOs) had been selected to participate in the first wave of the Medicare Shared Savings Program (MSSP).

The selected organizations have agreed to be responsible for improving care for nearly 375,000 beneficiaries in 18 states through better coordination among providers, CMS said. Participation in the program began April 1.

Jonathan Blum, CMS deputy administrator, told a press briefing that the agency received 50 applications from organizations wanting to start April 1, and is reviewing another 150 applications from organizations wanting to start July 1. The final phase of the MSSP is set to begin Jan. 1, 2013.

The newly selected organizations brings the total number of groups participating in Medicare shared savings initiatives to 65, including the 32 Pioneer Model ACOs that were announced last December (244 HCDR, 12/20/11), and six Physician Group Practice Transition Demonstration organizations that started in January 2011.

The Pioneer model was designed specifically for organizations with experience offering coordinated, patient-centered care and operating in ACO-like arrangements, CMS said. Pioneer ACOs are different from other ACOs in that they can reap a greater share of savings than traditional ACOs under the MSSP, although they also must take on more risk.

All ACOs that succeed in providing high quality care while reducing costs may share in the savings to Medicare. Quality is measured by performance on 33 measures relating to care coordination and patient safety, use of appropriate preventive health services, improved care for at-risk populations, and the patient experience of care.


The MSSP is on track “to fundamentally transform the [Medicare] fee-for-service program.”



--Jonathan Blum, CMS deputy administrator

Participation in an ACO is voluntary for providers, and beneficiaries retain their ability to seek treatment from any provider they wish.

Blair Childs, senior vice president of public affairs at the Premier healthcare alliance, expressed support for the selected organizations, calling them “true leaders fostering the movement toward team-based, coordinated care.”

Childs noted that “[f]undamental payment reform is needed to align incentives, and programs such as the MSSP provide the flexibility and innovation needed to step away from our broken fee-for-service system toward alternatives that reward quality and cost effectiveness.”

Moving Ahead Despite Uncertainty.

The 27 organizations were selected despite the uncertainty over the future of the Patient Protection and Affordable Care Act, which authorized the creation of the MSSP and is currently being debated by the Supreme Court, with oral arguments taking place over three days in late March.

CMS's Blum said during the briefing that the agency is confident the law will be upheld and cited “tremendous support” and excitement among providers to change the way care is delivered.

Blum said the program is off to a “phenomenal start” and is on track “to fundamentally transform the [Medicare] fee-for-service program. [The MSSP] is a model that can work in all parts of the country.”

Multiple Paths.

CMS said five of the 27 ACOs that started April 1 will participate in the Advance Payment ACO Model established by the CMS Center for Medicare and Medicaid Innovation.

Under the Advance Payment Model, each participating ACO will receive advance payments to help cover the costs of establishing the infrastructure needed to coordinate care for the beneficiaries they serve. The advance payments will be repaid from shared savings earned by the ACO. If an ACO does not complete the full, initial agreement period of the shared savings program, CMS will in most cases pursue full recoupment of advance payments (230 HCDR, 11/30/11).

Two of the newly selected ACOs applied for a version of the program that allows them to share in both risks and rewards, CMS said. Under that track, there is both upside and downside risk sharing from the start for participating health care organizations. Because these organizations are taking on risk for losses, they would also be eligible for a larger percentage of shared savings.

Majority Physician-Led.

The selected ACOs include more than 10,000 physicians, 10 hospitals, and 13 smaller physician-driven organizations in both urban and rural areas. Their models for coordinating care and improving quality vary in response to the needs of the beneficiaries in the areas they are serving, CMS said.

Blum said that despite concerns that only hospital-led groups will want to participate, most of the selected organizations are physician-led, a fact the American Medical Association said it was pleased with.

“Physician practices are benefiting from the financial assistance offered by the advanced payment initiative, which was created as a direct result of the AMA's recommendation to CMS. The upfront payments offered through this program help with the cost of starting an ACO, which is especially beneficial for small physician practices,” AMA President Peter W. Carmel said in a statement.

Carmel also said AMA strongly advocated for the advance payment model, and the CMS announcement “shows that allowing all interested physicians to lead and participate in this new model increases the number of groups forming Medicare ACOs. While not all physicians will choose to be part of an ACO, allowing all who are interested to participate in this new model helps its prospects for long-term success.”

By Nathaniel Weixel  

More information and a list of all selected groups are at

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