Medicare bonus test is a test for ACO’s

Only five out of 10 physician groups testing Medicare bonus payments for quality and spending control received payouts during the fourth year of the five-year experiment, according to an article in Modern Healthcare.

The article reports that to earn bonuses, doctors must first decrease spending by 2%. After that, physician groups may claim up to 80% of savings up to 5%, after which, Medicare retains the rest. This is the same basic formula that will be piloted with Accountable Care Organizations beginning in 2012. 

The American Hospital Association has urged CMS to be more lenient when developing rules for accountable-care organizations in order to improve the likelihood that ACOs will experience an early return on investment.

(Sources: Modern Healthcare,, December 15, 2010; Kaiser Daily Health Policy Project,, December 17, 2010)