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.