Archive of ACO

ACOs and Gainsharing:  What was old is new again Thumbnail

ACOs and Gainsharing: What was old is new again

by Jim Toole, managing director, life & health, FTI Consulting Accountable Care Organizations (ACOs) bring hospitals and physicians together as a risk bearing entity, aligning incentives betwee

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Accountable care organizations: Extending the techniques nationwide Thumbnail

Accountable care organizations: Extending the techniques nationwide

by Greger Vigen, FSA Given rising health costs and continuing uneven quality, major players in the health care industry (hospitals, physician groups, insurance companies and professionals like actu

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10Jan2012
Pioneer ACOs:  The experiment begins Thumbnail

Pioneer ACOs: The experiment begins

by Bob Tate, consulting actuary On Dec. 19, 2011 the CMS Innovation Center announced that 32 organizations have been selected to participate in their Pioneer ACO Model starting in 2012. Pioneer ACOs aim to deliver more coordinated and therefore better and more efficient care to Medicare Fee-For-Service (FFS) beneficiaries. If the ACOs can keep the Medicare FFS costs for their assigned populations below targets, while meeting standards for quality improvement, they can receive bonuses of up to 70% of the Medicare savings. It will be an interesting experiment. These organizations are effectively agreeing to reduce their revenues by X, with the opportunity to get 70% of X back. They must reduce their costs by more than the net revenue reduction (30% of X) to break even financially, and they must figure out how to pay for any investments to start the ACO. If they don’t meet their savings targets (trend lower than national Medicare FFS trend minus 1%, roughly), they get no bonus, and even have to pay back some losses to Medicare if their costs are too high. (more…)

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