Pioneer ACOs Show Mixed Results On Lowering Costs After First Year, CMS Says

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Nathaniel Weixel  


All of the 32 participants in the Pioneer accountable care organization program succeeded in improving quality performance, but less than half were successful at lowering costs, according to first-year results reported by the Centers for Medicare & Medicaid Services July 16.

According to CMS, all of the Pioneers successfully met quality measures for the first performance year, with all earning incentive payments for their reporting accomplishments.

By contrast, only 13 Pioneer ACOs performed well enough against cost benchmarks to share in savings for the program. They generated a gross savings of $87.6 million in 2012 and saved Medicare nearly $33 million. Two Pioneers spent more than their benchmark amount and will owe the government $4 million.

According to CMS, seven of the Pioneer ACOs that did not produce savings said they intend to apply to the “traditional” Medicare Shared Savings Program--another ACO model with more flexibility and lower risk levels. CMS said two of the Pioneers intend to completely leave the program.

ACOs are groups of doctors and hospitals organized to improve coordination of care for Medicare beneficiaries. The health care reform law created the MSSP for such entities. The Pioneer program is administered under the Center for Medicare and Medicaid Innovation and is designed for health care organizations and providers that have experience coordinating care for patients across care settings.

The program will allow those provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the MSSP.

Pioneers Leaving

CMS could not confirm which of the Pioneers were dropping out entirely and which were negotiating MSSP contracts. The agency did name the nine Pioneers that will not be participating in Round Two of the 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,

• Healthcare Partners California ACO LLC,

• JSA Care Partners LLC, and

• Presbyterian Healthcare Services.


Banner Health Network (BHN) in Phoenix, one of the Pioneers that is participating in Round Two, in a July 16 statement reported shared savings in excess of $13 million. BHN leaders said they were pleased with the results, and “are now focusing efforts on the true test of this model--whether it can be sustained and improved upon in coming years.”


“As early adopters, [the Pioneer ACOs] blazed a trail that can be used to help other providers and CMS in making future modifications to the program.”  




--Premier healthcare alliance

In the first year, BHN said it also demonstrated an ability to reduce hospital admissions, hospital length of stay, and the need for hospital readmissions by supporting beneficiaries when they are most at risk and in need of care and advocacy. BHN was a top performer in terms of shared savings, compared with other Pioneer organizations nationally.

“Through our experience, we believe the value-based Pioneer ACO model has merit, and that it has the potential to diminish the predominance of fee-for-service plans in government and private sectors,” Chuck Lehn, chief executive officer of Banner Health Network, said in a statement. “It is the best solution at this time for creating sustainability for the Medicare program, and could be the basis for historic change in the U.S. healthcare industry.”

Quality Success

Despite the mixed results on cost control, CMS said all 32 Pioneer ACOs performed better than benchmark rates in fee-for-service Medicare for all 15 clinical quality measures for which comparable data were available. Examples of the measures include readmissions, blood pressure control, and cholesterol control for diabetes patients. According to CMS, 25 of the Pioneers generated lower risk-adjusted readmission rates for their aligned beneficiaries than the benchmark rate for all Medicare fee-for-service beneficiaries.

CMS also said Pioneer ACOs performed better on clinical quality measures that assess hypertension control for patients. The median rate among Pioneer ACOs on blood pressure control among beneficiaries with diabetes was 68 percent, compared with the comparison value of 55 percent as measured in the adult diabetic population in 10 managed care plans across seven states from 2000 to 2001.

In a statement, the Premier healthcare alliance praised all the Pioneer participants. “As early adopters, they blazed a trail that can be used to help other providers and CMS in making future modifications to the program,” Premier said.

Blair Childs, senior vice president of public affairs at Premier, noted in the statement that “from the provider point of view, the Pioneer program is extremely ambitious, even for the most advanced health systems. Dropping from the Pioneer program does not mean that providers are abandoning their investments or wavering on the concept of ACOs.”

The American Medical Group Association (AMGA) in a July 16 statement said the overwhelming majority of its 25 members participating in the CMS Pioneer ACO program will continue. Doug Fisher, AMGA's chief executive officer, said all of the groups “are to be applauded for their leap of faith and their continued dedication to advancing the role of high-performing health systems in America.”

Fisher noted the movement to “value-based, coordinated care for patients is an evolutionary process. Programs like the ACO initiatives will take many years to mature. Our members are laying the foundation for future programs and innovative payment arrangements. These medical groups will continue to invest in improvements in care processes and infrastructure that will provide patients with better health outcomes, an enhanced care experience, and lower costs well into the future.”

By Nathaniel Weixel  

More information on the Pioneer ACO program is at