The Future of the Pioneer ACO Model. The future of the Pioneer ACO model, an initiative of the Center for Medicare & Medicaid Innovation (the Innovation Center), would seem to be up in the air, due to continued departures from the program, uneven financial results, and evidently greater focus by the Centers for Medicare & Medicaid Services (CMS) on revising the less-aggressive, yet more popular Medicare Shared Savings Program (MSSP). Attrition Launched in January 2012 with 32 generally high-profile accountable care organization (ACO) participants, the Pioneer ACO model lost nine ACOs after its first year. In August 2014, Sharp HealthCare, a five-hospital system in San Diego, exited the program, and the following month, three other ACOs—Franciscan Alliance in central Indiana, Genesys PHO in Flint, Mich., and Renaissance Health Network in Pennsylvania—dropped out. Cumulatively, in 2013-2014, the number of Pioneers dropped by 41 percent, from 32 original participants to 19. It should be noted, however, that the majority of the ACOs leaving the program transferred to the less challenging MSSP. Mixed Results On Oct. 8, 2014, CMS released detailed quality and financial data by ACO for the first two years of the Pioneer program. With regard to quality performance, average quality scores for the Pioneers improved by 19 percent year-to-year, with improved performance on 28 of 33 measures (85 percent) between the first and second year. Financially, in the first year of the program, 13 of the Pioneers (41 percent) met or beat their expenditure benchmarks, qualifying for an average of $5.9 million in shared savings, with the amounts received ranging widely. One Pioneer had to pay CMS $2.6 million, and the remaining 18 ACOs either did not earn shared savings or did not owe CMS money because of losses. Of the 23 organizations participating in year two, three chose to defer reconciliation until the end of the third year of the program. The remaining 20 Pioneers experienced a wide variety of results ranging from gross savings of $24.6 million to gross losses of $6.3 million. Fourteen Pioneers (61 percent) were able to reduce spending in year two, with 11 of these qualifying for shared savings. On average, these ACOs each garnered $6.2 million in shared savings, again with the amounts received ranging widely. Overall, the Pioneer program generated total gross program savings of $96 million in its second year, with $68 million of shared savings going to the ACOs. CMS’s Focus on Revamping the MSSP In a striking contrast with CMS’s relative silence during 2014 about possible changes to the Pioneer ACO Model, on Dec. 1, CMS released a detailed, 429-page proposed rule to modify the MSSP. The proposed rule seeks to retain as many of the current MSSP ACOs as possible and to attract new participants to the program. It introduces a broad range of changes, including: • Offering ACOs the opportunity to continue participating under the one-sided (i.e., upside-only) participation agreement (Track 1) after their first three-year agreement • Reducing risk to ACOs under the two-sided Track 2 • Offering an alternative risk-based Track 3, in which participants have higher sharing rates and prospective assignment of beneficiaries. The proposed rule allows MSSP ACOs operating under Track 1 to enter into another one-sided, three-year agreement under Track 1 if they performed well—achieving the quality performances and not generating losses greater than the negative minimum savings rate (MSR)—in at least one of the first two performance years of the first performance period. Under the proposed rule’s new option, Track 3, an ACO can prospectively assign beneficiaries (i.e., the ACOs will know at the outset which beneficiares are included in its network). Track 3 also includes the following financial features: • A fixed MSR and minimum loss rate (MLR) of 2 percent • A maximum sharing rate of 75 percent of shared savings, depending on the ACO’s quality performance • A performance payment limit (gain cap) of 20 percent of the ACO’s updated benchmark • A shared loss rate of at least 40 percent and no more than 75 percent • A shared losses limit (loss cap) of 15 percent of the ACO’s updated benchmark In what might be interpreted by some as a signaling of future consolidation of the Medicare ACO programs, the proposed rule provides a condensed application form for Pioneers to join the MSSP. A Pioneer ACO choosing to join the MSSP would have to enter into a two-sided model, either Track 2 or 3. It should be noted that Track 3 is very similar to the first and second years of Pioneer Option B, a two-sided model with maximum sharing rates of 70 percent share in year one and 75 percent in year two, gain and loss caps of 15 percent, and an MSR of 1 percent. The Future of the Pioneer Program Although modifications to the Pioneer program and another class of Pioneers are expected to be announced in 2015, the Pioneer ACO model will most likely continue to serve its basic purpose as a kind of experimental laboratory for vetting possible future modifications to the MSSP and/or developing other alternative payment models. Such a role is in line with the Innovation Center’s mission to test “innovative payment and service delivery models to reduce program expenditures...while preserving or enhancing the quality of care.” For example, in November 2014, the Innovation Center disclosed that it was experimenting with allowing Medicare beneficiaries to opt into the Pioneer program for a handful of Pioneer ACOs. Therefore, while the Innovation Center would certainly be pleased with an increased number of Pioneers, the Pioneer program’s success should be measured on the basis of the quality and cost performance of its relatively limited number of participants and the generation of tested refinements to ACO models. hfma.org/Content.aspx?id=27171
Posted on: Sat, 10 Jan 2015 16:52:02 +0000
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