The recently announced Medicare ACOs participating in the Shared Savings Program are split into two tracks. Track 1 ACOs will receive a smaller percentage of a shared savings cut with CMS, 50 percent, but will not be penalized if their patient care cost CMS more money than intended. Track 2 ACOs are potentially better suited for larger health systems able to manage financial risk. They can keep up to 60 percent of savings if quality metrics are met, but will need to repay CMS if patient care expenses increase by more than 2 percent.
ACOs can set aside cash reserves, establish a line of credit, withhold money from future CMS payments or purchase reinsurance to prepare for financial losses. Small ACOs may find reinsurance a better option because they have less capital to lean on than larger organizations.
More Articles on ACOs:
CMS Names First 27 Medicare ACOs
60 Accountable Care Organizations to Know
ACOs Present a ‘Great Opportunity’ for Third-Party Administrators
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
