PEORIA — OSF Healthcare System is one of 32 health care systems in the country piloting a new federal model designed to lower costs while providing quality care to Medicare recipients.

On January 1, OSF Health System began implementing the Medicare Pioneer Accountable Care Organization model that was designed to create a network of Accountable Care Organizations (ACOs), consisting of health-care providers, including hospitals and doctors, who are accountable for their patients’ health rather than their patients’ sickness.
In compliance with the Patient Protection and Affordable Care Act that was passed in 2010 to reduce the amount of Medicare funds the federal government distributes, the model that is operated by the Centers for Medicare and Medicaid Services Innovation Center changes the way health care systems are compensated for treating Medicare patients.
Instead of being paid on a total fee-for-service basis for the treatment of Medicare patients, ACOs receive incentives and bonuses based on how well they improve the health of their Medicare patients while lowering their health care costs.
“CMS (Centers for Medicare and Medicaid Services) has defined the purpose as better health, better care, reduced cost for patients,” said Tara Canty, the senior vice president and chief operating officer of accountable care for OSF Healthcare System. “This is done through implementing innovative approaches to health delivery, patient, experience and overall quality of care.”
Prior to piloting the Pioneer ACO model, OSF Healthcare System had experience dealing with ACO-type arrangements with private insurers, which is part of the reason they were one of 32 health care systems selected to pilot the model out of a group of 80 applicants.
“OSF Healthcare was selected through an extensive review process measuring our capacity to implement, measure and perform initiatives that are believed to provide better health, better care and reduce cost,” said Canty.
OSF Healthcare System has a network of seven hospitals and over 650 physicians in Central Illinois that are participating in the initiative.
While participating in the initiative, OSF Healthcare System facilities will either earn federal funding or lose federal funding, depending on their ability to reduce costs while improving the health of their Medicare patients, said Canty.
“OSF Healthcare has both upside and downside risk for the ACO population,” said Canty. “If we increase total cost of care, we pay a portion of that increase to Medicare. If we are successful in both improving care and reducing cost, we earn a portion of that savings CMS realizes.”
Canty doesn’t expect OSF Healthcare System to merge it facilities, in an attempt to reduce health care costs.
“We don’t anticipate significant structural changes due to the ACO,” said Canty.
According to healthcare.gov, Pioneer ACOs are expected to save the federal government $960 million in Medicare over the next three years.
About 45 percent of OSF Healthcare System’s patients are covered by Medicare.
OSF Healthcare System was the only health care system in Illinois selected to participate in the initiative. Pioneer ACOs represent 18 states and have the opportunity to improve the care of about 860,000 Medicare beneficiaries.