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As currently envisioned by the federal government, Medicare ACOs may not be right for urban safety-net hospitals

iStock_000005564268XSmallAccountable Care Organizations, or ACOs, are a promising but increasingly controversial part of the Affordable Care Act.  In early April, CMS issued a proposed regulation governing its Medicare Shared Savings Program; this was the long-awaited ACO regulation.  NAUH has sent CMS extensive comments regarding the proposed regulation.

In this letter, NAUH cites obstacles to urban safety-net hospital participation, including the lack of resources most of these hospitals suffer and the imbalance between the potential rewards the program offers and the risks they would face.  NAUH also notes that the program fails to take into account the potentially substantial Medicaid  savings the federal government may enjoy when ACOs with urban safety-net hospitals serve low-income urban communities with many Medicaid patients.

To address these shortcomings, NAUH recommends that CMS provide seed money – grants, not loans or advances against future shared savings – to help private urban safety-net hospitals participate in ACOs.  NAUH also recommends giving urban safety-net hospitals a greater proportion of shared savings and a share of Medicaid savings as well, thereby altering the risk/reward balance and making ACO participation more feasible for private, non-profit urban safety-net hospitals.  Read the proposed regulation here and NAUH’s entire comment letter here.

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