Success of CMS ACO Pilot could bring big changes to Medicare payment structure

The Center for Medicaid and Medicare Services’ (CMS) Pioneer Accountable Care Organization (ACO) program successfully saved Medicare nearly $400 million in spending over two years, clearing the way for CMS begin expanding the program nationwide.

A CMS study released May 4, 2015 on the JAMA website, revealed that expenditures for Medicare beneficiaries receiving care through Pioneer ACOs increased less than expenditures for non-ACO, fee-for-service (FFS) beneficiaries in the program’s first two years.  The study is available here.

In an ACO, hospitals or physician groups that keep costs of care low for a group of Medicare patients while meeting quality measures, can split the savings with Medicare.  This win-win program, gives doctors and hospitals  a reason to spend less in a system that traditionally rewarded overutilization.  The favorable findings in the  report issued by the Office of the Actuary, an independent division of CMS, makes the Pioneer ACO program  the Affordable Care Act’s first alternative payment program to be certified to cut cost while improving quality.

This report follows the announcement by HHS January that it intends to tie 30 percent of Medicare payments to quality and value measures by 2016, through alternative payment models like ACOs;  and 50 percent of payments by 2018.  The success of the Pilot ACO program and its anticipated expansion give health care providers much to consider as the  industry shifts toward alternative payment models.

Faced with several different reimbursement options — some of which are confusingly similar– today’s health care providers are often confused and mislead.  Rafael A. Gaitan, Esq. works with health care providers to evaluate their options and determine what organizational and payment structure is best for that provider.  Whether considering participation in an ACO or IPA, starting your own ACO or IPA, setting up a boutique practice, or considering another option, Mr. Gaitan can guide you through the process.  For more information, please contact Rafael A. Gaitan Esq. at 786.440.8115 or via e-mail at

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Click here to learn more about ACOs from the CMS website.