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New private ACOs in California, New Jersey

By Patrick Ouellette

- After 89 new accountable care organizations (ACOs) were added to the Centers for Medicare & Medicaid Services (CMS) recently, there has been more ACO-type movement this week.

Today, Cigna Corporation and the Palo Alto Medical Foundation (PAMF), a not-for-profit health care multispecialty organization in California, revealed that they’re forming an ACO-like organization that connects doctors, hospitals and a single health plan. The initiative’s goals are to:

- Expand patient access to health care

- Improve care coordination

- Improve health outcome quality

- Lower total medical costs

- Increase patient satisfaction

PAMF operates more than 40 individual medical clinics that together serve over 750,000 patients in communities covering Alameda, San Mateo, Santa Clara and Santa Cruz counties. This is Cigna’s first accountable care effort in California. According to PAMF, about 1,000 of its primary and specialty care physicians will now care for as many as 21,000 individuals covered by a Cigna PPO health plan. Cigna will compensate PAMF for the medical and care coordination services it provides and organizations may be rewarded through a “pay for performance” structure if it hits quality and cost-lowering goals.

And yesterday, Aetna and Hunterdon HealthCare Partners agreed to create a new ACO, which will have the same goals as listed above for the PAMF accountable care project. About 2,200 members in the Hunterdon Healthcare employee benefits plan, and approximately 5,700 fully insured Aetna members who live in Hunterdon, Mercer, Warren, Morris and Somerset Counties will be served by the ACO. Providers will be paid based on measures such as the percentage of Aetna members who receive recommended preventive care and screenings, including increased cancer screenings, flu shots and other vaccinations.

“In the past several years, the healthcare industry has changed with the demands of health care reform. The industry trend is shifting from paying for services, regardless of patient outcomes, to paying for care that delivers better value, quality and patient satisfaction. Collaborating with Aetna will help Hunterdon Healthcare deliver better care at a better price. We think patients will see direct benefit from this approach,” explained Robert P. Wise, president and CEO, Hunterdon Healthcare according to Aetna.com.

Neither of these ACOs are currently government funded, so it wouldn’t be a stretch to say that organizations are quickly picking up on the idea that ACOs and ACO-type organizations can be beneficial beyond incentive payments from CMS. There are obviously the factors of A. reduced cost for all parties involved and the B. improving patient care through better access to medical data and more coordinated care. At the moment, these ACOs look like they’ll be great in the short term. The question will be whether these organizations will accomplish these items over the long haul if they add on to their organizations and costs rise in the process.

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