A recent announcement from Health and Human Services (HHS) Secretary Kathleen Sebelius points to the growing importance of Accountable Care Organizations (ACOs) in serving the nation’s Medicare patients.  As of July 1, more than 2.4 million beneficiaries were receiving care from providers participating in ACOs, which are formed by groups of doctors and other healthcare providers to deliver coordinated patient care.

Noting the recent formation of 89 new ACOs, Sebelius said almost half are physician-driven organizations serving fewer than 10,000 beneficiaries.  These ACOs have entered into agreements with Centers for Medicare & Medicaid (CMS) that provide an opportunity to share in savings realized through high-quality, coordinated care. “We applaud every one of these doctors, hospitals, health centers and others for working together,” said Sebelius.

While participation in an ACO is purely voluntary for providers, it’s clear that the federal government has a strong stake in this program, which was made possible by the 2010 Affordable Care Act.  One reason: federal savings from this initiative could be up to $940 million over four years.

There could also be significant potential financial benefits for participating physician groups who join with other providers to form an ACO that meets the federal criteria.  For example, CMS has established 33 quality measures for 2012 relating to care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and patient and caregiver experience of care.

However, U.S. healthcare providers will need to weigh the potential financial benefit with the actual costs related to forming an ACO - including preparing a mutually acceptable agreement, completing an application and meeting CMS quality standards - before making a decision to take part in this initiative.