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Pioneers! Oh Pioneers! ACO Demonstrations: Pioneer and Advance Payment Models

Last week CMS announced a new ACO demonstration to be run through the Center for Medicare and Medicaid Innovation (Innovation Center). Through three different programs, the Innovation Center will work with providers to lead them through the implementation process for establishing an ACO. The demonstration will be run concurrently with the Shared Savings Program that was created by health reform. CMS released rules governing that program in late March which will also be applicable to ACOs that are established through the demonstration.

The demonstration allows for a Pioneer Model ACO geared at incorporating private payers into the system, especially for experienced organizations already coordinating care for patients across care settings. ACOs would be eligible for higher levels of shared savings, receive payment through capitation and therefore eligibility would be assigned on a prospective basis. CMS is already accepting applications from interested parties which are due by July 18, 2011. Additionally, the Advance Payment ACO Model is also available for organizations that want to become an ACO but need assistance with start-up costs. ACOs would be eligible to receive a monthly per member per month payment for setting up staff and infrastructure with payments recouped through ACOs shared savings earnings.

Finally, to assist entities in development of an implementation plan, CMS is hosting four free sessions to teach providers what steps they can take to improve care delivery and provide better care. Interested parties must apply for acceptance to the sessions and must bring key personnel to the meeting. We believe this is a signal from CMS that they are seriously working to ensure the success of ACOs and encourage participation from multiple participants.

Vermont Passes First Single-Payer System in America

Vermont is poised to become the first state in America with a publically financed single-payer health system. The program, Green Mountain Care, will be funded by the federal and Vermont state governments as well as employers. To equalize the rates consumers pay for their insurance, Vermont will need to seek a Medicaid waiver from the federal government. Additionally, the state will have to encourage national employers to utilize Green Mountain care for their Vermont based employees.

Unfortunately, the bill does not specify how exactly the program will be paid for nor does it provide estimates on how much it will actually cost. One possibility includes a payroll tax. An independent panel has been tasked with providing recommendations on financing. Implementation of the system won’t begin until 2014, when health reform requires the creation of an exchange program, and may not be complete until 2017 when PPACA allows states to seek a waiver from exchange requirements. That date could be sooner if the feds begin entertaining waiver applications prior to 2017 to accommodate pioneering initiatives from states like Vermont.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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