Only five of the 89 new ACOs chose the so-called two-sided risk model that has greater earning potential but also puts providers on the hook if savings metrics fall short. Blum says "by far" most organizations chose the safer one-sided risk model, which pays only on achieved savings. All ACOs in their second contract period will have to take two-sided risk.
The 89 new ACOs were selected from an applicant pool of more than 150 providers. Beginning this year, ACO applications will be accepted annually. The application period for the Medicare Shared Savings Program that begins in January 2013 runs from Aug. 1 through Sept. 6.
Simeon A. Schwartz, MD, president/CEO of White Plains, NY-based WESTMED Medical Group, says the shared-savings program had the financial incentives to compel his 200-physician primary care-focused multispecialty practice to become an ACO.
"We think the savings are largely going to come out of hospital utilization because we see already in our organization that there have been many opportunities to move care to the outpatient setting," says Schwartz, who joined Blum on the midday teleconference.