AHA urges CMS for more grants to fund ACOs

The American Hospital Association (AHA) has asked the Centers for Medicare & Medicaid Services (CMS) to offer additional grants to foster the development of accountable care organizations (ACOs), it said in a news brief last week.

Although the AHA supports part of the proposed ACO regulations that would pre-pay a portion of projected future savings to participants, it suggests that this initiative be linked to additional funding.

"Formation of an ACO will require significant upfront investment, and we urge the CMS Innovation Center to combine the Advance Payment Initiative with a grant program to offset the extensive investment needed to form an ACO, particularly in the case of small and/or rural hospitals and other organizations," said Linda E. Fishman, an AHA senior vice president of public policy analysis and development, in a letter to CMS officials.

The AHA estimated that a single 200-bed hospital could spend as much as $11.6 million to start up an ACO, while a five-hospital system may spend more than $26 million.

It asked that grants be made available to aid in the areas of care coordination and discharge management, where expenses are expected to be considerable.

For more:
- here's the AHA letter (.pdf)
- read the AHA News Now brief