The US Department of Health and Human Services (DHHS) proposed the initial set of guidelines for the establishment of ACOs under the Medicare Shared Savings Program (PPACA Section 3201) on March 31, 2011. Patient Protection and Affordable Care Act According to CMS estimates, ACO implementation as described in the Affordable Care Act was estimated to lead to an estimated median savings of $470 million from 2012 to 2015. By increasing care coordination, ACOs were proposed to reduce unnecessary medical care and improve health outcomes, reducing utilization of acute care services. The ACO's model of fostering clinical excellence while simultaneously controlling costs depends on its ability to 'incentivize hospitals, physicians, post-acute care facilities, and other providers involved to form linkages and facilitate coordination of care delivery'. The model places a degree of financial responsibility on providers in hopes of improving care management and limiting unnecessary expenditures, while providing patients freedom to select their medical service providers. Track 1 was the most popular, with more than 80% of ACOs selecting it this allowed the ACOs to avoid the possibility of shared loss. It offered four tracks for ACOs: 1, 1+, 2, and 3. The MSSP had a much larger scope than the Pioneer program. It is the program by which a US ACOs interact with the federal government, and by which ACOs can be created. Īfter the Pioneer program launched, the Medicare Shared Savings Program (MSSP) was established by section 3022 of the Affordable Care Act. According to CMS the savings were due, in part, to reduction in hospital admissions and readmissions. Two Pioneer ACOs generated losses totaling an estimated $4 million. The Pioneer ACOs earned an estimated $76 million. CMS stated that 19 out of 32 pioneer ACOs produced shared savings with CMS. Costs for similar beneficiaries grew by 0.8 percent in the same period. According to them, costs for more than 669,000 beneficiaries served by Pioneer ACOs grew by 0.3 percent in 2012. On July 7, 2013, the Centers for Medicare and Medicaid Services announced the results of the pioneer ACO demonstration. For the 2014 reporting period, MSSP ACOs saved a combined $338 million, or $63 per beneficiary. As of April 2015, Medicare had approved 404 MSSP ACOs, covering over 7.3 million beneficiaries in 49 states. When the program concluded in the end of 2016, only nine of the original 32 Pioneers remained. Medicare approved 32 pioneer accountable care organizations in December 2011 of which 19 remained active through 2015.

Pioneer program and Medicare Shared Savings Program Reliable and increasingly sophisticated performance measurement, to support improvement and provide confidence that savings are achieved through care improvements.Payments linked to quality improvements and reduced costs.Provider-led organizations with a strong base of primary care that are collectively accountable for quality and per capita costs across the continuum of care.Mark McClellan, Elliott Fisher and others defined three core accountable care organization principles: Like an HMO, an ACO is 'an entity that will be 'held accountable' for providing comprehensive health services to a population.' The model builds on the Medicare Physician Group Practice Demonstration and the Medicare Health Care Quality Demonstration, established by the 2003 Medicare Prescription Drug, Improvement, and Modernization Act. It resembles the definition of Health Maintenance Organizations (HMO) that emerged in the 1970s. In 2009, the term was included in the federal Patient Protection and Affordable Care Act. The term accountable care organization was first used by Elliott Fisher in 2006 during a discussion of the Medicare Payment Advisory Commission. According to the Centers for Medicare and Medicaid Services, an ACO is 'an organization of health care practitioners that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it'. The organization is accountable to patients and third-party payers for the quality, appropriateness and efficiency of the health care provided. They use alternative payment models, normally, capitation. ACOs in the United States are formed from a group of coordinated health-care practitioners. An accountable care organization ( ACO) is a healthcare organization that ties provider reimbursements to quality metrics and reductions in the cost of care.

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