On November 17, 2009, the Centers for Medicare & Medicaid Services (CMS) released a report stating that the rate of dollars lost through unnecessary and improper Medicare payments has more than doubled from 3.6 percent in 2008 to 7.8 percent ($24.1 billion) in 2009.¹  Policymakers, stakeholders, and other proponents of reform have proposed an alternative to current fee-for-service models used for Medicare reimbursement through the implementation of Accountable Care Organizations (ACOs), within which physicians and hospitals would be reimbursed based on their ability to meet quality-of-care indicators and minimize overall costs instead of the current fee-for-service basis for reimbursement.² ACOs would also be awarded for meeting patient satisfaction and national quality standards (e.g., making sure diabetics get regular foot exams).³ Conversely, if the providers in a given ACO fail to meet certain quality and cost savings targets, those providers would receive a lower reimbursement rate for Medicare payments.⁴

On December 3, 2009, a group of freshmen Democratic senators issued a press release outlining their proposal to create ACOs on a national scale, aimed at strengthening cost-containment measures, through an amendment to the pending health care legislation.⁵ These senators argue that, under the current bill, funding is too limited for ACOs, which the Congressional Budget Office estimates have the potential to save U.S. taxpayers $4.9 billion over the next ten years.⁶ However, the immediate implementation of ACOs is not universally supported.  Dr. Robert Berenson, a fellow at the Urban Institute in Washington, D.C., believes that while ACOs may be an idea worth experimenting with, they are not yet a viable option due to hurdles such as a lack of: (1) collegiality between physicians; and, (2) desire on the part of physicians to participate.⁷