CMS will incorporate the Pioneer ACO program into MSSP

Experts worry whether other providers can replication participants' success

Although data released recently by CMS indicate that the Pioneer ACO program reduced Medicare spending by nearly $400 million over two years, experts say it is not clear how participants achieved those savings and how other groups can repeat that success, Modern Healthcare's Melanie Evans reports.

About the Pioneer ACO program

Under the Pioneer program, which launched in January 2012, participating providers contracted with CMS to meet quality targets and assume new risk when caring for a set population of Medicare beneficiaries; in exchange, they received additional financial incentives. The program was designed to reward early adopters of coordinated care models and offer the health industry an example of successful outcomes-based pay models.

Why some Pioneer ACOs are dropping out

However, some participants took issue with the structure of the program. By last year, 10 of the original 32 Pioneer ACOs had dropped out of the program, with some moving into the Medicare Shared Savings Program (MSSP). Despite that, CMS on Monday released data showing the Pioneer ACO program saved Medicare nearly $400 million in spending over two years.

The data found that expenditures for Medicare beneficiaries receiving care through Pioneer ACOs increased slower than expenditures for non-ACO, fee-for-service beneficiaries in the program's first two years. The finding by independent actuaries means the Pioneer ACO program is the ACA's first alternative payment program to be certified to cut cost while improving quality. As a result, CMS is now authorized to begin rolling out elements of the program nationwide.

Pioneer ACOs work—and are ready to expand, Medicare officials say

Experts unsure if results can be replicated

According to Modern Healthcare, CMS plans to expand the Pioneer program to other organizations by incorporating it into MSSP. However, experts are uncertain whether new participants would see similar benefits.

Michael McWilliams, an associate professor of health care policy and medicine at Harvard University, says organizations that do not have equal levels of investment or prior experience with initiatives to manage care costs might take longer to transition to such programs. CMS has proposed allowing such organizations more time to comply with the program's standards, according to Modern Healthcare.

Further, McWilliams said additional policy changes could be needed to encourage new organizations to join the Pioneer program. According to McWilliams, the recent CMS data show that savings among ACOs that dropped out of the Pioneer program were similar to those that continued the program.

How one Pioneer ACO saved money—and why another one didn't

As a result, policy changes might be needed to ensure participating groups can more easily obtain financial rewards that are not possible under existing rules. In addition, experts have said the findings offer little insight into specific ways the ACOs achieved savings under the program. For example, the CMS data showed a reduction in the amount the organizations spent on primary care office visits.

However, the program focuses on encouraging patients to receive care in such settings, which generally are less costly. Commonwealth Fund Vice President for Medicare and Cost Control Stuart Guterman said, "I am not sure how to explain it," adding, "It's hard to tell exactly what's going on, but whatever it is, it looks like it's good" (Evans, Modern Healthcare, 5/7 [subscription required]).

The takeaway: CMS plans to expand the Pioneer program to other organizations by incorporating it into MSSP, but experts are uncertain whether new participants would see similar benefits as the original cohort.

The big picture: Understand Medicare's big move to value-based pay


HHS this year unveiled ambitious goals for reforming Medicare payments for hospitals and physicians that would make 30% of payments through alternate payment models like ACOs and bundled payments by 2016. And some key private payers have made a similar pledge. Read our Q&A with Rob Lazerow to understand what the "historic" commitment means for providers.

Then, download our easy-to-navigate field guide to Medicare payment innovation, which explains how ACOs, bundled payments, pay-for-performance penalties, and other programs fit into the Medicare payment landscape.

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