Pioneer ACOs: Some Say Risk Not Worth Reward

August 12, 2013
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Pioneer ACO Experiment Produces Mixed Results

pioneer ACOsAfter a one year experiment with the Medicare Pioneer Accountable Care Organization (ACO) Model which has 32 participants, nine of these organizations will be transferring to another Medicare shared savings program, while two are dropping from the program completely.

Pioneer ACO Experiment Produces Mixed Results

pioneer ACOsAfter a one year experiment with the Medicare Pioneer Accountable Care Organization (ACO) Model which has 32 participants, nine of these organizations will be transferring to another Medicare shared savings program, while two are dropping from the program completely.  Another 10 organizations saw no cost savings in the first year, but have remained in the program.

ACOs are groups of physicians, hospitals and other health-care providers that band together to assume financial responsibility for patients.  An ACO takes responsibility for the care of an assigned patient and for ensuring that the patient receives access to both primary care physicians and needed specialists.  If the patient has to go outside of the ACOs network of providers, the ACO sustains a financial penalty.  The overall idea is to pay physicians for quality of care rather than volume of services, and those ACOs who achieved certain quality benchmarks for high quality low cost care would receive a portion of the shared savings, while those who do not demonstrate this ability would face a penalty.

A Medicare spokesperson has stated that “the results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients.” However, some healthcare experts say that the picture is not as rosy, at least from a financial perspective.  In fact, although the program reported an overall savings of $87.6 million only 13 of the pioneers experienced a level of savings adequate to qualify for shared savings, and two of the Pioneer ACOs ended up owing the Medicare program $4 million dollars, despite the ACOs heavy investment in staffing and infrastructure to support the model requirements.

In fact the Pioneer ACO program has been experiencing both success and failure on large scales throughout the duration of the experiment.  Earlier this year several organizations threatened to drop out of the program if CMS was unwilling to revise certain quality and pay for performance measures, and several high profile organizations declined to apply.  Though the Pioneer ACO program is one of many initiatives which was launched to evaluate potential cost savings as part of the Affordable Care Act, it was never intended to be a primary value inducer.  Experts have pointed out two primary hurdles to the Pioneer ACO model which, according to Tom Cassel include:

  • “the programs administrative complexity”; and
  • “the limited upside its financial model presents for even the most successful ACOs”

Other problems cited include data sharing barriers, and discrepancies regarding quality metrics.

Pioneer ACOs Leaving the Program

The following Pioneer ACOs will be leaving the program and transferring to the Medicare Shared Savings Program:

  • Prime Care Medical Network Inc.
  • University of Michigan
  • Physician Health Partners LLC
  • Seton Health Alliance
  • Plus (North Texas Specialty Physicians and Texas Health Resources)
  • Healthcare Partners Nevada ACO LLC
  • JSA Care Partners LLC
  • Presbyterian Healthcare Services

Additionally, Presbyterian Healthcare Services of New Mexico has dropped out of the program altogether as well as another entity whose name has not yet been announced.

For those Pioneer ACOs still in the program year two is anticipated as being the make or break point for the pilot overall in terms of success and efficacy.  In the meantime helathcare experts are holding their breath and awaiting the findings to determine if the risk really will be worth the reward.

(ACO experiment / shutterstock)

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