Pioneer ACOs Produce Mixed Results First Year
All 32 Pioneer accountable care organizations (ACO) successfully reported quality measures and achieved the maximum reporting rate for the healthcare delivery model’s first performance year, with all earning incentive payments for their quality accomplishments. Only 13 ACOs, however, produced enough savings to share about $33 million with Medicare. Nine ACOs are choosing to either move to the Medicare Shared Savings Program, or leave the program.
Results are detailed in the report “Pioneer Accountable Care Organizations succeed in improving care, lowering costs” by the Centers for Medicare & Medicaid Services (CMS). The agency maintains it went well. The program, a key part of the Affordable Care Act (ACA), commenced January 2012. Under the Pioneer ACO model, financial rewards to ACOs are determined by how much ACOs save Medicare and whether they meet certain quality performance criteria. ACOs earn bonuses when Medicare’s spending for enrollees slows against a target set by the federal agency.
Costs for the more than 669,000 beneficiaries aligned to Pioneer ACOs grew by only 0.3 percent in 2012, whereas costs for beneficiaries not in ACOs grew by 0.8 percent in the same period, said the agency. CMS reported 13 out of 32 Pioneer ACOs generated a gross savings of $87.6 million in 2012, saving nearly $33 million to the Medicare Trust Funds. The report claims Pioneer ACOs earned over $76 million by providing coordinated, quality care. Only two Pioneer ACOs had shared losses totaling approximately $4 million. Program savings were driven, in part, by reductions that Pioneer ACOs generated in hospital admissions and readmissions, CMS said.
But the program’s first year wasn’t without disappointment for nine participants. Seven Pioneer ACOs are leaving the program to apply for the Shared Savings Program—a less risky reimbursement model—because they were unable to produce savings. Two more participating ACOs are leaving the program altogether. CMS said that Primecare Medical Network, Physician Health Partners, Plus (North Texas Specialty Physicians and Texas Health Resources), HealthCare Partners Nevada ACO, HealthCare Partners California ACO, JSA Care Partners, Seton Health Alliance, University of Michigan, and Presbyterian Healthcare Services will not continue in the second year of the Pioneer program.
Under the Pioneer ACO program, all participants not demonstrating savings must pay CMS back beginning the second year if spending grows beyond a target. Some Pioneer ACOs chose payments in year one with no risk for losses. Others, like Atrius Health, will pay. Altrius may owe CMS $2 million for the first year, according to Modern Healthcare. Altrius blames the shortfall on low Medicare budgets, but is still upbeat about participation.
Beyond cost savings, CMS report points to quality measures indicating Pioneer ACOs “performed better than published rates for fee-for-service Medicare for all 15 clinical quality measures.” It also heralds that 25 of the ACOs generated lower risk-adjusted readmission rates than fee-for-service, measures that assess hypertension control were 13 percent higher in the adult diabetic population, and cholesterol control measures were 9 percent higher.
CMS also touts examples of improved care provided by the Pioneer ACOs:
- Banner Health Network dispatches hospital-trained nurses to patients’ homes to do whatever the patient needs: Manage prescription drugs, take blood-sugar readings, teach healthy eating habits, arrange delivery of a motorized wheelchair, and other services.
- Monarch HealthCare ACO offers care coordination—a service for beneficiaries who need assistance with coordinating the medications and many care visits associated with having multiple diagnoses.
More than 250 ACOs are certified by CMS, so far, with most using the Shared Savings model. ACOs are groups of clinicians, facilities, and other healthcare providers who organize to coordinate care for patients, the goals being to improve quality of care and cut Medicare costs. ACO patients receive care from a number of disciplines without leaving the ACO, which shares medical information and care plans for the patient. There are three types of ACOs: Pioneer ACO, Medicare Shared Savings Program, and Advance Payment.