News Feature | October 23, 2014

CMS Establishes New Affordable Care Act Initiative To Promote Rural ACOs

Christine Kern

By Christine Kern, contributing writer

Successful healthcare ACO

New initiative will provide upfront loans to create coordinated care centers for rural and underserved locations.

The Centers for Medicare & Medicaid Services has announced it is making available $114 million in upfront investments for as many as 75 ACOs in rural and underserved locations nationwide. The new initiative is designed to better coordinate care in these regions and provide more flexibility in providing quality healthcare.

“The ACO Investment Model will give Medicare Accountable Care Organizations more flexibility in setting quality and financial goals, while giving them greater accountability for delivering quality care efficiently,” said CMS Administrator Marilyn Tavenner in a press release. “We are working with these organizations to make necessary investments that encourage doctors, hospitals and other health care providers to work together to better coordinate care and keep people healthy.”

According to the release, the new initiative “will provide up front investments in infrastructure and redesigned care process to help eligible ACOs continue to provide higher quality care” in order to increase the effectiveness of Medicare ACOs in providing lowers costs and improved healthcare to eligible beneficiaries across the nation. CMS states that they will recoup their investments through an offset of an ACO’s earned shared savings.

Eligible ACOs include those who joined the Shared Savings Program in 2012, 2013, and 2014, as well as new ACOs joining the program in 2016. The application deadline for those who joined in the first two years is December 1, 2014, while those who joined in 2014 or will start in 2016 will be able to apply during the summer of 2015.

According to a CMS FAQ Fact Sheet, ACOs that participated in the Advance Payment Model or those owned or operated in whole or in part by a health plan are not eligible for the ACO Investment Model. This initiative will target new ACOs serving rural areas and areas with low ACO penetration, as well as existing ACOs that are committed to moving to higher risk tracks, according to CMS. Preference will be given to ACOs that:

  • provide high quality of care
  • achieved their financial benchmark
  • demonstrate exceptional financial need
  • submit compelling proposals for how they will invest both their own funds and CMS funds

The ACO Investment Model was a response to concerns that some MSSP ACOs lacked adequate access to necessary capital to create the requisite infrastructure to properly implement population care management.

The goal of this initiative is to “encourage ACO formation in areas of low ACO penetration in order to produce better care and lower costs for Medicare fee-for-service (FFS) beneficiaries.” Another aspect of the initiative is to encourage existing MSSP ACOs to transition to higher-risk arrangements in order to more efficiently improve care for FFS beneficiaries and generate Medicare savings.