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New ACO Rules Outline Gains And Risks For Doctors, Hospitals

Doctors and hospitals that join together under a new model of care could pocket as much as 60 percent of the money they save Medicare but could also face hefty penalties if they fall short under rules proposed by the Obama administration.

The Medicare Shared Savings Program, which would allow providers to band together as "accountable care organizations," has been one of the most eagerly awaited creations of last year's health care law. Its architects said they hope these closely coordinating organizations would help reduce the often disjointed and duplicative methods through which much medical care is delivered today.

"We need to bring the days of fragmented care to an end," said Kathleen Sebelius, secretary of health and human services. "For way too long the federal government has been a bystander and in some cases a barrier while others work to improve a health care delivery system that frustrates providers and fails patients."