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Local providers join Medicare ACO program

July 9, 2012

Indiana University Health, as well as a partnership of Franciscan Alliance and American Health Network, have formed accountable care organizations that won the blessing of the federal Medicare program.

The federal Centers for Medicare & Medicaid Services on Monday announced 89 health-care-provider organizations that, beginning this month, will strive to win bonus payments by reducing health care spending while also meeting federal standards on 33 measures of quality and patient satisfaction.

That so-called Shared Savings program now includes 116 health care provider groups around the country. There are also 38 groups participating in shared savings testing projects.

The program is a key element of the 2010 health reform law, which proponents hope will change the financial incentives for hospitals and doctors—rewarding them for working together to keep patients healthy rather than for performing more services.

Medicare, which serves all Americans 65 and older, is the nation’s largest health insurance program. Its accountable care program is being mimicked by some private health insurers, such as Indianapolis-based WellPoint Inc., as a way to improve quality while also reducing costs.

“Better coordinated care is good for patients and it saves money,” said Kathleen Sebelius, secretary of the U.S. Department of Health & Human Services, which oversees Medicare, in a statement. “We applaud every one of these doctors, hospitals, health centers and others for working together to ensure millions of people with Medicare get better, more patient-centered, coordinated care.”

Each accountable care organization must take responsibility for managing the health of at least 5,000 Medicare patients. In one estimate, the federal government expects the program to save it $940 million over a four-year period—although others say the savings could be a lot less.

Monday’s announcement included three organizations based in Indiana, plus three more that serve patients here.

Indianapolis-based IU Health is the state’s largest hospital system, with 20 hospitals around the state. Its accountable care organization includes 1,837 physicians, which come from its own employed physicians as well as a network of individual physician practices and a community health center.

Franciscan Alliance, which operates 13 hospitals in Indiana and Illinois, has partnered with Indianapolis-based American Health Network—the state’s largest independently owned physician practice. Their ACO will include 245 physicians, although it’s not clear where exactly the organization will operate.

Franciscan's three Indianapolis-area hospitals already were participating in one of Medicare’s test projects of the shared savings concept, known as the Pioneer ACO Model. Franciscan was one of 32 hospital systems nationally—and the only hospital system in Indiana—to be part of that model.

Evansville-based Deaconess Health System also will participate in the Medicare Shared Savings program with 323 physicians.  It will serve Medicare beneficiaries in Illinois, Indiana and Kentucky.

Some Hoosier seniors will be served by Owensboro ACO in Owensboro, Ky., which has 26 physicians; Quality Independent Physicians in Louisville, which has 74 physicians; or Mercy Health Select in Cincinnati, a group of hospitals with 365 employed physicians.

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