Health Law Alert: Accountable Care Organizations: More Guidance, but at what Cost?

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Recognizing that clinical and financial integration among health care providers can lead to efficiencies that will benefit patients, the Patient Protection and Accountable Care Act of 2010 (ACA) delegated to the Centers for Medicare and Medicaid Services (CMS) the authority to approve accountable care organizations (ACOs) to participate in the Medicare Shared-Savings Program. ACOs are comprised of different types of health-care providers (e.g., teams of doctors, hospitals, and other health care providers) who join together to coordinate and improve care for Medicare patients. The benefits of ACOs to their participating providers are twofold: (1) the ability to share in the savings they create; and (2) the ability to jointly negotiate with commercial payers to provide health care services. To obtain approval from CMS to participate in the Shared Savings Program, ACOs must clinically integrate their providers in ways so they are likely to meet CMS’s quality and cost-savings standards.

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