HHS names 32 ‘pioneers’ in key program to cut healthcare costs

The Health and Human Services Department on Monday named 32 organizations that will take the lead in testing out the healthcare law’s biggest effort to cut costs and improve quality.

The healthcare law created accountable care organizations (ACOs), which are integrated networks of doctors, hospitals and other healthcare providers. HHS on Monday announced 32 “pioneer” ACOs — groups that already have experience with the basic model of an ACO and can therefore help test the program more quickly.

ACOs are the biggest piece of a larger effort to shift healthcare payments away from the quantity of services provided and toward a system that rewards better outcomes. If ACOs succeed in saving the Medicare program money, those savings will be split between Medicare and the participating providers. Pioneer ACOs are eligible for a bigger share of those savings.

HHS’s initial proposals for ACOs drew sharp criticism from several large, integrated systems that were seen as models for the new framework. And Medicare’s chief actuary later said policy considerations about how to make the program work were sidelined by a push for the highest possible savings estimates. Regulators retooled the proposal, however, and providers lauded the changes as a solid foundation for creating ACOs.

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