Becker's Hospital Review

20 Clinical Integration & ACOs O f the 114 accountable care organiza- tions that joined the Medicare Shared Savings Program in 2012, just 54 saved money in their first 12 months, and only 29 of those generated enough savings to share in them with Medicare. Overall, the program's 2012 ACOs generated a total of $128 million in net savings for the Medicare Trust Fund. The savings are "within the range originally projected for the program's first year," according to CMS, even though more than half of the partici- pants did not meet their savings benchmarks. CMS characterized the interim results as a "strong start this early in the program," and final perfor- mance results from the first year of the program will be released later in 2014, according to the news release. Additionally, more information released by CMS shows the 23 remaining Pioneer ACOs gener- ated gross savings of $147 million in their first year while delivering high-quality care. Nine of the Pioneers had "significantly lower spending growth relative to Medicare fee for service while exceeding quality reporting requirements," the news release states. All together, the Shared Savings and Pioneer ACO programs saved Medicare more than $380 million in their first year. n Pioneer, Shared Savings ACOs Save Medicare $380M By Heather Punke ACOs Take $4M of Startup Capital, Survey Finds By Molly Gamble A survey has found the average startup costs of accountable care or- ganizations in the first 12 months of operation hit $2 million, but ACOs will likely need twice as much since any shared savings can take another year to flow. The National Association of ACOs released its National ACO Survey, which examines first-year startup costs and expected financial gains or losses after the first year of operation. The survey was designed to capture information from the April 1, 2012, and July 1, 2012, CMS Medicare Shared Savings Program ACOs after they complet- ed their first year of operation. Findings are based on responses from 35 ACOs that range from 5,100 to 78,000 assigned Medicare beneficiaries. The average (mean) startup costs of ACO respondents in the first 12 months of operation totaled $2 million. Startup costs ranged from $300,000 to $6.7 million. Since ACO savings flow slowly, due to the complexities of data collection and reconciliation, ACOs will have almost a second full year of operations until their cash flow is replenished from shared savings with CMS — if any, ac- cording to the survey. This means the average ACO will risk $3.5 million plus feasibility and pre-application costs. The NAACOS estimates that in total, ACOs on average will need $4 million of startup capital until there is a chance for any recoupment from savings. n 9 Rural Providers in Michigan, California and Indiana Form ACO By Heather Punke P rovider organizations in nine rural communities in Indiana, Michi- gan and California have bonded together as the National Rural ACO and joined the Medicare Shared Savings Program as an accountable care organization. To qualify for the MSSP as an ACO, organizations need to have at least 5,000 Medicare beneficiaries attributed to them. By themselves, none of the NRA- CO's members could have qualified for the program. Additionally, with high ACO start-up costs, few of NRACO's members could have afforded it alone. The NRACO was formed so rural organizations could overcome those ob- stacles and become an ACO, according to a news release. "Rural communities can join the NRACO at a fraction of the cost of setting up their own pro- gram and reap the benefits for their communities and patients," Lynn Barr, the founder of the NRACO, said in a news release. The organization partnered with Stratis Health and Inland Empire Health In- formation Exchange to help with data exchange and care coordination efforts. Members of the NRACO include: • Margaret Mary Community Hospital (Batesville, Ind.) • Memorial Hospital (Logansport, Ind.) • Alcona Health Centers (Lincoln, Mich.) • McKenzie Health System (Sandusky, Mich.) • Mammoth Hospital (Mammoth Lakes, Calif.) • Northern Inyo Hospital (Bishop, Calif.) • Southern Inyo Healthcare District (Lone Pine, Calif.) • Ridgecrest (Calif.) Regional Hospital • John C. Fremont Healthcare District (Mariposa, Calif.) n SUBSCRIBE TODAY! Becker's Hospital Review CEO Report E-weekly To subscribe to the FREE E-weekly, visit www.BeckersHospitalReview.com and click on the "E-weekly" tab or call (800) 417-2035

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