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Accountable Care Organizations

May 20, 2011 | No Comments
Posted by Frank Ciesla

Dr. Donald Berwick, Administrator of CMS, has recently written about the potential benefits of Accountable Care Organizations (ACO’s), ( as is set forth in the attached article one of the hurdles facing the provider community is that ACOs will cost millions of dollars that are unlikely to be recouped (at least in the short term).  Society has yet to design a methodology for encouraging investment of these millions for the creation of ACOs.  As we pointed out in our prior blogs posted on May 10, 2011 and on May 12, 2011, these costs currently pose a significant barrier to ACO implementation.

As Dr. Berwick has acknowledged, providers have let the Administration know that they have concerns about the amount of capital needed for ACO implementation, the amount of shared savings that will be available and the complexity of the proposed ACO regulations.  It is likely that CMS will need to redesign the regulations and set forth a methodology that appropriately meets the Administration’s objective of higher quality and cost containment, in a way that encourages providers to invest in and create ACOs.  This may set the process back a year or more in light of the amount of time taken to create the initial draft regulations, which many providers have found unacceptable.

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