Although the ink is barely dry on the proposed regulations for Accountable Care Organizations (ACOs), there are already harbingers that ACOs may not be the Health Care Reform savior they were intended to be.

First, a study by the American Hospital Association states that the estimate initially made by CMS for the cost of establishing an ACO, which was $1.8 million, is significantly understated. The AHA has estimated that a 200 bed single hospital system would need $1.6 to create an ACO and that a five hospital system with 1,200 beds would need $26.1 million to create this larger version of the ACO.

Second, CMS is already offering easier softer versions of ACOs, and have issued a press release announcing the following:

Pioneer ACOs: The Pioneer ACO process is intended to entice existing integrated systems which have already adopted significant care coordination processes to move further and faster into seamless coordinated care by utilizing the new ACO payment methodology.

·         Advanced Payment ACOs: This model would give certain ACOs participating in the Medicare Shared Savings program access to their shared savings upfront, which is intended to assist with the now presumably greater investment necessary to establish the ACO.

·         Accelerated Development Learning Sessions: This initiative is a free program funded by CMS to educate providers regarding the ACO process.