Seven Pioneer ACOs that did not produce savings in the first year of the Pioneer program will switch to the Medicare Shared Savings Program (MSSP), and two will abandon Medicare accountable care models altogether, CMS announced on Tuesday.
The announcement came on the same day that CMS unveiled data from the first year of the Pioneer ACO program. It showed that all 32 participants improved the quality of patient care in the first year of the program, but only about one-third lowered costs enough to generate shared-savings.
Pioneer ACOs drop out
The nine ACOs dropping out of the program are:
- Primecare Medical Network;
- University of Michigan;
- Physician Health Partners;
- Seton Health Alliance;
- Plus (North Texas Specialty Physicians and Texas Health Resources);
- HealthCare Partners Nevada ACO;
- HealthCare Partners California ACO;
- JSA Care Partners; and
- Presbyterian Healthcare Services.
CMS did not say which of the ACOs plan to transition to MSSP, Modern Healthcare reports.
>> Also see: Tom Cassels explains how to interpret the latest news on Pioneer ACOs
First-year Pioneer results: Quality
According to the data released by CMS, all of the 32 Pioneer ACO participants improved patient care in the first year of the program. For example, 25 of the 32 Pioneer ACOs had lower risk-adjusted readmission rates for their beneficiaries than the benchmark rate for fee-for-service beneficiaries.
As a group, the Pioneer ACOs outperformed Medicare fee-for-service organizations for all 15 comparable quality measures. Additionally, all of the Pioneer ACOs reported better patient satisfaction scores than Medicare fee-for-service providers, agency data show.
First-year Pioneer results: Cost
Initial indicators from the first-year results show that the Pioneers were able to slow cost increases. On average, costs for the more than 669,000 Medicare beneficiaries in Pioneer ACOs increased by just 0.3% in 2012, compared with 0.8% growth for Medicare fee-for-service beneficiaries, CMS said.
However, not all Pioneers were able to cut costs for their beneficiaries.
- 13 Pioneers get shared savings: Just 18 of the participants were able to lower costs for the Medicare beneficiaries they treated, and only 13 of those participants were able to lower costs enough to generate shared savings. In 2012, those 13 ACOs generated $87.6 million in gross savings.
- Two Pioneers face shared losses: Two of the participants spent more for each of their Medicare beneficiaries than fee-for-service providers. As such, they will owe Medicare about $4 million for 2012.
Experts: Accountable care is a 'marathon, not a sprint'
"These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients," CMS Administrator Marilyn Tavenner said in a press release, adding that the Affordable Care Act "has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off."
Meanwhile, several health care analysts were unsurprised that more Pioneers did not achieve savings in the first years, noting that the program gives its participants three years to do so. They note that many of the participating hospitals' patients are still under traditional payment contracts. "It's hard to manage two separate sets of books, and it's hard to ask doctors to practice medicine in two different ways," says The Advisory Board Company's Chas Roades.
Former CMS Administrator Mark McClellan told the Journal that undertaking major health care reforms is "a marathon, not a sprint." He lauded the hospitals' quality improvements, saying, "It's a big step just to be able to track which of your patients has diabetes, let alone improving their care at less cost" (Beck, Wall Street Journal, 7/16; Blesch, Modern Healthcare, 7/16 [subscription required]; CMS release, 7/16; University of Michigan release, 7/16; Zigmond, Modern Healthcare, 7/16 [subscription required]).
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