WASHINGTON — A multi-media blitz from HHS and CMS this
week detailed a government proposal to form Accountable Care
Organizations (ACOs) — entities comprised of doctors,
hospitals and other health care providers to better coordinate care
for Medicare patients.

On a press call yesterday, HHS Secretary Kathleen Sebelius said
greater efficiencies from ACOs could yield savings of up to $960
million over a three-year period. But during a Q&A on the call,
a CMS official admitted that figure could conceivably end up about
$400 million lower.

ACOs are part of health care reform, as mandated by the
Affordable Care Act. "Rules we are proposing today will help teams
of doctors, hospitals and other health care providers form ACOs
where they will be able to take full responsibility for the health
of their patients," said Sebelius during her opening statement. "In
return, if they meet the tough standards for health care quality,
they will be able to share in savings that come with improving care
coordination and improving health. This will align the way we pay
for care with the kind of care we know is most effective."

The concept is to give physicians and others in the ACO a
financial incentive to make sure patients get the proper care. "One
in every five Medicare beneficiaries who leaves the hospital is
back within 30 days," Sebelius said, adding that in many cases, "it
is because they failed to receive the correct follow-up care."

According to CMS Administrator Donald Berwick, MD, "An ACO will
be rewarded for providing better care and investing in the health
and lives of patients. ACOs are not just a new way to pay for care
but a new model for the organization and delivery of care."

For home care advocates, the idea of shifting government's focus
to more effective care has been a priority for many years.

Wayne Stanfield, president and CEO of the National Association
of Independent Medical Equipment Suppliers, believes ACOs are the
perfect opportunity to reiterate that message. "I firmly believe
that care delivered under the ACO structure will have an effect on
home care providers," said Stanfield. "A large part of saving,
beyond eliminating duplication of tests and services, will be
reducing inpatient care through home care services. DME suppliers
will need to be involved with all of their local ACOs to remain in
the referral stream.

The ACO model announced is "somewhat different than some
speculated in that providers will continue to bill for their
services as in the past," Stanfield explained. "Under such a
primary care model, with one leading PCP directing a patient's
integrated care, suppliers will be at the leading edge of reducing
costs through prevention and wellness. Under the ACO model, growth
in home care means a cost reduction on the other side of the

Stanfield urged all HME providers "to engage their hospital
systems and make sure they are at the table as these ACOs are

"If the focus of ACOs is on coordinating and improving care to
ensure patient safety and preventative measures, especially for
frail or elderly beneficiaries in Medicare, then clearly HME must
be a part of that picture," added the American Association for
Homecare's Michael Reinemer, vice president, communications and
policy. "This is exactly what home care provides for Medicare
beneficiaries. We want to make sure policymakers and regulators
connect those dots."

According to the official press release from HHS, ACOs will create
"incentives for health care providers to work together to treat an
individual patient across care settings — including doctor's
offices, hospitals, and long-term care facilities. The Medicare
Shared Savings Program will reward ACOs that lower health care
costs while meeting performance standards on quality of care and
putting patients first." Patient and provider participation in ACOs
is purely voluntary.

The proposed rule and joint CMS/OIG notice are posted at

A fact sheet is available at target="_blank">www.HealthCare.gov/news/factsheets/accountablecare03312011a.html.
Comments on the proposed rule will be accepted for 60 days, and CMS
will respond to all comments in a final rule to be issued later
this year.