According to a fact sheet from the Centers for Medicare and Medicaid Services (CMS), Accountable Care Organizations (ACOs) in Medicare’s Pioneer ACO Model and Medicare Shared Savings Program (SSP) are performed well to date. This is resulting in improved care for beneficiaries and cost savings for the Accountable Care Organizations and Medicare. Senior housing providers play an important role in these ACOs, and help improve care and generate savings for ACOs. ACOs provide another opportunity for senior housing providers to generate positive returns, which they can then use to grow organically or through acquisitions. Senior housing providers interested in obtaining capital to grow their acquisitions should look to the Chicago-based financing firm Cambridge Realty Capital. They offer many different options for acquisitions, sale/leasebacks, joint ventures, and for other purposes as well.

The Affordable Care Act includes a number of provisions designed to encourage the growth of Accountable Care Organizations. Since the law was, more than 350 ACOs were created. Together they serve nearly six million Americans. ACO’s members work together to coordinate care for beneficiaries under the theory that increased coordination among healthcare providers will result in increased efficiencies, better care, and lower overall healthcare costs. An ACO’s performance is measured against benchmarks established by CMS. ACOs that surpass those benchmarks receive shared savings payments from the government that are shared by its members. These payments, and the opportunities to establish relationships with other healthcare providers, are the primary incentives for senior housing operators to join Accountable Care Organizations.

According to CMS, the Accountable Care Organizations in its Pioneer ACO Model and Medicare Shared Savings Program produced approximately $372 million in savings so far. These savings were generated by 23 Pioneer ACOs during their second performance year, and 220 Shared Savings Program ACOs during their first performance year. CMS was particularly pleased with the results of the Pioneer ACOs because, of the 32 originally in the program, a number of them dropped out for various reasons. This caused concern there might be problems with the ACO model. While the ACO model could be improved in some ways, the savings that were generated by the remaining ACOs, and the positive care results, give CMS confidence that the fundamental structure of the program is sound.

Senior housing providers that participate in Accountable Care Organizations were also pleased to learn that ACOs are performing well. They made a strong effort to get involved in these organizations, and it appears to be paying dividends for many of them. Going forward, senior housing operators should continue to explore Accountable Care Organizations to see if joining one could provide financial and marketing opportunities for them, as well as additional care opportunities for their residents.

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