New ACO Developments Announced

by King & Spalding

In two new Accountable Care Organization (ACO) developments, 15 of the 89 ACOs recently announced by CMS have been approved as “advance-payment” ACOs, which means they will receive some of their anticipated savings upfront to defray start-up costs, and Cigna has announced new ACO initiatives in six states. 

The 15 latest ACOs to receive advance payments operate in 10 states, according to the CMS website.  A list of the 15 ACOs can be found here. As advance payment ACOs, these ACOs will qualify to receive advance payments of their anticipated savings in three forms:  an upfront fixed payment, an upfront variable payment based on the number of enrollees, and a monthly payment based on the size of the ACO.  To be eligible for advance payment, ACOs must either:  1) operate with less than $50 million in annual revenue and not include a hospital, or 2) operate with a critical access or low-volume rural hospital and have less than $80 million in annual revenue.

CMS said it would accept advance payment model applications for 2013 ACOs from August 1st through September 19th.  More information about the advance payment ACO benefits and requirements can be found here. 

In other ACO news, Cigna announced new ACO initiatives in the following six states:  California, Colorado, Texas, Ohio, Maine, and Vermont.  Cigna’s news release on these new ACOs is available here.

Cigna’s ACO in California is with the Palo Alto Medical Foundation, an affiliate of Sutter Health.  This is Cigna’s first ACO arrangement in California and will cover about 21,000 patients.  Cigna's ACO in Colorado is with New West Physicians in Denver, its ACO in Texas is with St. Luke's Health System Clinically Integrated Providers and Renaissance Physician Organization, its ACO in Ohio is with Mount Carmel Health Partners in Columbus, its ACO in Maine is with Martin’s Point Health Care and Mercy Health System, and its ACO in Vermont is with Fletcher Allen Health Care and Central Vermont Medical Center.   For each of these ACOs, Cigna has said that registered nurses will be “critical to the program’s benefits” since they will “serve as clinical care coordinators to help patients navigate their health care system.”   In addition, Cigna has said that all of “these programs focus on expanding patient access to health care, improving care coordination, and achieving the ‘triple aim’ of improved health outcomes (quality), affordability and patient satisfaction.”

According to Cigna’s press release, “Cigna is now engaged in 32 collaborative accountable care initiatives in 16 states, encompassing more than 300,000 Cigna customers and more than 4,500 primary care physicians.”

Reporter, Daniel J. Hettich, Washington, D.C., +1 202 626 9128,

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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