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Accountable Care Organizations Taking Shape

—January 5, 2012

The Department of Health and Human Services (HHS) recently announced the 32 organizations selected to participate in the Pioneer Accountable Care Organization (ACO) model. Starting Jan. 1, 2012, these organizations will be able to start ACOs aimed at improving care and cutting costs for Medicare Beneficiaries.

Learn More: What is an Accountable Care Organization?

The 32 Pioneer ACOs, which were selected from a pool of 80 applicants, could be responsible for the care of 860,000 Medicare beneficiaries. Medicare Advantage members will not be eligible to participate. HHS has estimated the project could save up to $1.1 billion over five years by testing the effects of several payment arrangements aimed at providing better care and outcomes at a lower cost. When an ACO succeeds in delivering high quality care and cutting costs, it shares in the savings it achieves for the Medicare program.

While ACOs are controlled by health care providers, some insurance carriers are getting involved, playing the role of investor, advisor and provider of a wide range of services to ACOs. It remains to be seen what role, if any, agents will play in this new model.

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