Three accountable-care organizations won approval Tuesday to participate in the Centers for Medicaid Services' Shared Savings Program. The 27 groups in 18 states selected Tuesday join 32 "pioneer model" ACOs approved in December and six demonstration ACOs created in January 2011.
The three New Jersey ACOs are: the Atlantic ACO, a partnership between the Atlantic Health System and Valley Health System; the Hackensack Physician-Hospital Alliance ACO, a program of Hackensack University Medical Center; and the Optimus Healthcare Partners ACO, which is based in Summit and formed by the Vista Health System Independent Practice Association and the Central Jersey Physician Network.
Under the program, Medicare patients who volunteer to participate in one of the ACOs will see new levels of coordination between the physicians and health care organizations they use. It also means those organizations will be rewarded based on 33 criteria relating to quality of care and elimination of unnecessary or duplicate procedures and hospitalizations.
Dr. David J. Shulkin, president of Morristown Medical Center and administrator of the Atlantic ACO, said the new ACO system will reward health care providers for lowering costs.
He said government actuaries will calculate how much the agency is likely to spend on participating patients' health care. If the ACO succeeds in keeping costs below those targets, the resulting savings will be split between the government and the ACO.
"The gain-share is the ability for the federal government to share money with the ACO if we can reduce expenditures, and then the ACO can share that money back with the doctors and hospitals that are not fundamentally working to keep people healthy," he said.
According to a hospital spokeswoman citing CMS figures, Atlantic's ACO is the largest in New Jersey and the second-largest in the United States.
Shulkin said he expects ACOs to survive even if the federal health care law that created the Shared Savings Program is overturned.
Robert C. Garrett, president and CEO of Hackensack University Medical Center, said his team is "thrilled" that its application was accepted.
"Coordination of care and efficient use of resources have been a focal point for our medical center, and we look forward to continuing this commitment through our newly formed ACO," Garrett said in prepared remarks.
All told, more than 1.1 million Medicare beneficiaries nationally could now be served by an ACO. And that number could soon grow: The Centers for Medicare and Medicaid Services said it is currently reviewing 150 applications from ACOs seeking to enter the program in July.