Posted on June 21, 2011 08:14
Categories: Medicare | Medicaid
Topics: Health Care Reform | Medicaid | Medicare | Providers | Spending
The American Hospital Association (AHA) has released a study estimating that start-up and first year costs of an accountable care organization (ACO) could be up to 14 times those projected by U.S. Department of Health and Human Services (HHS) officials. Outlined in the national health care reform law to coordinate patient care, ACOs are networks of physicians and hospitals. In its proposed rules governing ACOs, the Centers for Medicare & Medicaid Services (CMS) estimated start-up and first year costs for an ACO at $1.8 million; however, AHA’s report projects that those costs will be between $11.6 million and $26.1 million. The authors recommend that CMS restructure its ACO shared savings payments to reflect these higher costs.
From the study:
Most health care organizations see substantial work ahead in order to create the type of accountable care organizations (ACOs) that are envisioned to work with private insurers, Medicare, Medicaid, state health exchanges and/or employers. ACOs are intended to manage the health of a defined population and to be held accountable and reimbursed based on measurable improvements in quality and patient satisfaction, plus reductions in costs.
Full Report: Activities and Costs to Develop an Accountable Care Organization (PDF 1.05 MB)
American Hospital Association. (2011). Activities and costs to develop an accountable care organization.
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