Franciscan, American Health join new ACOs

Franciscan St. Francis Health and American Health Network continue getting deeper into the accountable care organization concept promoted by the federal Medicare program under the 2010 health reform law.

Franciscan is providing the administrative backbone to a new accountable care organization started by Union Health System in Terre Haute. The organization, called Franciscan Union ACO LLC, will serve patients in Illinois and Indiana.

Franciscan already is part of two other accountable care organizations. The Mishawaka-based hospital system’s three Indianapolis-area hospitals are part of Medicare’s Pioneer ACO Model. Franciscan was one of 32 hospital systems nationally—and the only one in Indiana—to be part of that model.

Also, Franciscan and American Health, an Indianapolis-based physician practice, teamed up in July to form the Franciscan AHN ACO with American Health’s roughly 150 physicians around Indiana. They relied on Indianapolis-based health insurer Advantage Health Solutions Inc. to handle the claims and data analysis necessary to run a successful ACO.

Now American Health is using its know-how in operating accountable care organizations to help a Bloomington physician practice known as Premier Healthcare LLC start an ACO called Indiana Care Organization LLC. The ACO will serve an estimated 8,000 Premier patients in the Bloomington area and involve 21 Premier Healthcare primary care providers.

With those two startups and another Indiana-based ACO approved this month, a total of seven organizations operate around the state. Nationwide, there are more than 250 accountable care organizations.

“Accountable care organizations save money for Medicare and deliver higher-quality care to people with Medicare,” Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, said in a prepared statement.

Each accountable care organization must take responsibility for managing the health of at least 5,000 Medicare patients. In one estimate, the federal government expects the program to save it $940 million over a four-year period—although others say the savings could be a lot less.

All accountable care organizations work to win bonus payments from Medicare by reducing health care spending while meeting federal standards on 33 measures of quality and patient satisfaction.

The program is a key element of the 2010 Patient Protection and Affordable Care Act, which proponents hope will change the financial incentives for hospitals and doctors—rewarding them for working together to keep patients healthy rather than for performing more services.

Medicare, which serves all Americans 65 and older, is the nation’s largest health insurance program. Its accountable care program is being mimicked by some private health insurers, such as Indianapolis-based WellPoint Inc., as a way to improve quality while reducing costs.

The other Indiana-based ACOs are operated by Indianapolis-based Indiana University Health and by Evansville-based Deaconess Health System.