Amidst the national discussion over the implementation of the
Patient Protection and Affordable Care Act (PPACA), the Centers for
Medicare and Medicaid Services (CMS) recently reported early
results of the Pioneer accountable care organization (ACO) model.
Separate from but complementary to the Medicare Shared Savings
Program (SSP) and other ACO initiatives, the Pioneer ACO model was
specifically designed by CMS for organizations experienced in
coordinated care and risk-sharing. As a result, the 32 health
systems participating in the Pioneer ACO program were selected by
CMS for their potential to demonstrate and prove the ACO
The ACO concept garners controversy in healthcare circles,
depending, it seems, upon one's perspective. Some argue that
any savings and improvements achieved by ACOs will be short-lived,
while others contend that ACOs will go the way of the dodo bird --
likening it to the unrealized promise of managed care from the
1990s. At the same time, since the passage of PPACA in early 2010,
425 public and private market ACOs reportedly exist in operation
nationally. So the broad spectrum of shared savings approaches
central to the ACO model were adopted within a short three years in
a manner that has penetrated far beyond the Medicare program
initiatives found within PPACA.
Highlights of the results from the first performance year of the
Pioneer ACO model include the following:
All 32 participating health systems were able to show improved
patient care related to quality and patient satisfaction
benchmarks, specifically with respect to cancer screenings and
controlling blood pressure.
Only 18 of the 32 health systems lowered costs for the Medicare
patients they treated.
Thirteen systems saved enough to share savings with the
Two systems cost Medicare more and reportedly may owe $4
million back to the program.
Savings totaled $140 million, $76 million of which will be
returned to the Pioneer ACOs as their portion of the shared
savings. A net savings of $33 million will be returned to the
Medicare trust funds.
Nine Pioneer ACOs -- Prime Care Medical Network, Inc.;
University of Michigan Health System; Physician Health Partners
LLC; Seton Health Alliance; Plus ACO (North Texas Specialty
Physicians and Texas Health Resources); Healthcare Partners Nevada
ACO LLC; Healthcare Partners California ACO LLC; JSA Care Partners
LLC; and Presbyterian Healthcare Services -- will be leaving the
program. Seven have opted to participate in the SSP while two will
leave the program altogether.
The early results from the Pioneer ACO program show that a
majority of participating health systems indicated improvement in
care delivery and promise in the area of cost savings, including
the ability to participate in those cost savings. Although the jury
is out as to whether ACOs will be able to secure lasting
improvements in cost, quality and population health objectives, the
early results are a cause for optimism. At a minimum, the ability
of providers to attain some level of budget certainty and positive
improvement in the benchmarks required suggests that movement in
this general direction should be sustained. Ensuring that this
effort does not adversely impact provider long-term viability in
the process is the challenge that confronts us.
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In the July 3, 2014, issue of the Federal Register, The Centers
for Medicare & Medicaid Services (CMS) published the proposed
calendar year 2015 Medicare physician fee schedule update (the