San Fernando Valley Business Journal

Heritage Provider Network to Partner with Medicare in ACOs

By Judy Temes Wednesday, December 21, 2011

Northridge-based Heritage Provider Network (HPN) was selected this week to participate in the Pioneer Accountable Care Organization (ACO) model, a new initiative sponsored by the Centers for Medicare & Medicaid Services (CMS) Innovation Center. HPN is the largest of the 32 organizations selected into the Pioneer ACO program with 144,000 Medicare patients now part of the Heritage California ACO.

Through the Pioneer ACO Model, HPN will work with CMS to provide Medicare beneficiaries with higher quality care, while reducing growth in Medicare expenditures through enhanced care coordination.

The Pioneer ACO initiative could save CMS up to $1.1 billion over five years by encouraging primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare.

“I am very pleased Heritage Provider Network has been selected to participate in the Pioneer Accountable Care Organization model,” Dr. Richard Merkin, president and CEO of Heritage Provider Network said in a statement. “For over 30 years, we at HPN have encouraged and supported an accountable care model of healthcare—a model predicated on providing care that is

of the highest quality, that improves the health of our members, and that lowers their healthcare costs. We look forward to continuing these practices with this innovative program.”

HPN won the opportunity to partner with CMS as part of a competitive selection process that began in May with the national release of a Request for Applications from the agency. HPN was among six California organization and 32 nationally selected to participate in the pioneer program. Groups were selected based on their demonstrated capabilities to offer high quality, coordinated care.

“These Pioneer ACOs represent our nation’s leaders in health systems innovation, providing highly coordinated care for patients at lower costs,” Marilyn Tavenner, acting administrator of CMS said in a statement. “Heritage Provider Network has demonstrated significant experience in providing high quality, coordinated care, and we are excited to partner with them,” Tavenner said.

Heritage California ACO is operated by the Heritage Provider Network (HPN), founded in 1979 by Dr. Richard Merkin, president and CEO. The HPN Network is comprised of Heritage Provider Network, Inc. and its ten affiliated medical groups and Independent Physician Associations (IPA) which operate throughout eight counties in Southern, Central and Coastal California, spanning San Luis Obispo and Tulare Counties to the North, Orange County to the South, Riverside and San Bernardino Counties to the East, and the entire Los Angeles basin.

HPN delivers care to 700,000 individuals through 2,300 primary care physicians, 30,000 specialist physicians and over 100 hospitals.

The Pioneer ACO Model is being developed and tested by the new CMS Innovation Center. The Innovation Center was created by the Affordable Care Act to test new models of health care delivery and payment. Organizations that succeed in delivering high quality care at a lower cost will be able to transition from a fee-for-service payment model to a population-based payment system in which CMS pays physicians a fixed amount per month to meet the total health care needs of each patient. Under such a model, physicians would assume the financial responsibility for the cost of caring for patients.