July 09--Eighty-nine groups of medical care providers, including two based in Chicagoland, have been selected to participate in a new health care delivery system that aims to improve medical quality and reduce costs for Medicare patients, the Obama administration said Monday.

Advocate Health Partners, a physician group affiliated with the largest network of hospitals in Illinois, and Chicago Health System ACO LLC, a part of Vanguard Health Chicago, which operates four suburban hospitals, have formed Accountable Care Organizations, or ACOs, and have signed on to participate in the government's "Medicare Shared Savings Program," an initiative of President Barack Obama's 2010 health care overhaul that was upheld by the Supreme Court two weeks ago.

ACOs are organizations formed by groups of doctors and other medical care providers that agree to work together to coordinate care for people with Medicare, the federal health insurance program for the elderly.

Under the government program, providers are rewarded with shared savings if they're able to achieve better health outcomes for a pool of patients. It's a shift away from the traditional "fee-for-service" model, which pays providers based on services provided.

The government estimates federal savings from the effort could be up to $940 million over four years.

After Monday's announcement, a total of 154 ACOs have signed on to the program, which will provide care to more than 2.4 million Medicare beneficiaries, according to the federal Centers for Medicare and Medicaid Services, which administers the Medicare program.

More than 400 other organizations have indicated they intend to submit applications to CMS to launch Medicare ACOs in January 2013, said Jon Blum, CMS's acting principal deputy administrator.

To qualify, organizations must cover at least 5,000 Medicare beneficiaries and achieve 33 quality measures for patients.

Four other ACOs approved Monday also count Illinoisans among their Medicare patients:

--Evansville, Ind.-based Deaconess Care Integration LLC will serve people in Indiana, Kentucky and Illinois;

--Davenport, Iowa-based Genesis Accountable Care Organization LLC will serve beneficiaries in Iowa and Illinois;

--Des Moines, Iowa-based Iowa Health Accountable Care LC will serve Medicare patients in Iowa, Missouri and Illinois;

--St. Louis-based BJC HealthCare ACO LLC will serve people in Missouri and Illinois.

Oak Brook-based Advocate teamed with Blue Cross and Blue Shield of Illinois to launch a commercial ACO in January 2011.

pfrost@tribune.com -- Twitter: @peterfrost

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