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Several Pioneer ACOs may exit program

By Melanie Evans
Posted: June 28, 2013 - 7:45 pm ET

Medicare's most ambitious test of accountable care could lose a substantial number of its participants after the first year.

As many as nine of 32 Pioneer accountable care organizations—the name given to Medicare's first and highest-risk test of the payment model—may exit the program, according to the CMS, and at least four have started to notify providers. At least four of the departing ACOs tentatively say they will join Medicare's lower-risk ACO alternative, the Shared Savings Program, the CMS said.

Pioneers must decide by July 31.

“We're encouraged that these organizations want to continue in programs that promote better care at lower costs,” said CMS spokesman Alper Ozinal. “We fully anticipated that as these programs get up and running, some organizations would shift between models.”

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Medicare launched the Pioneer ACOs in January 2012 under the Center for Medicare and Medicaid Innovation, which was created by the Patient Protection and Affordable Care Act.

Pioneers entered into contracts that required hospitals and doctors to achieve savings on patients' medical costs and meet quality targets in order to receive financial incentives. ACOs stood to earn bonuses in the first year, and some agreed to more high-stakes deals that included larger potential rewards and possible losses. The Pioneeers also committed to entering into substantial ACO contracts with commercial payers.

Cost and quality results for the first year are not yet available. Pioneer contracts grow more aggressive each year. All Pioneers risk possible financial losses based on performance after the second year, which began last January.

By contrast, ACOs in Medicare's Shared Savings Program may choose an option with no potential for financial penalties for the first three years. The program is larger, with 220 ACOs, and is expected to expand again next year.

Whether all Pioneer ACOs would continue with the initiative has been in doubt since February, when providers challenged proposed benchmarks for quality performance in the second year. CMS agreed to revise the benchmarks, but negotiations between Pioneers and the CMS continued and talks were not limited to the quality debate.

Presbyterian Healthcare Services, based in Albuquerque, has not yet decided whether to exit the Pioneer program, said Kristen Krebs, a spokeswoman for the system. Presbyterian's President and CEO Jim Hinton said in May that the system was in talks with Medicare officials to address concerns about geographic variation that could affect incentives.

Hinton said another issue is that Medicare's Pioneer program does not lock patients into the ACO's provider network, yet ACOs still are responsible for the quality and cost of patients' care. The CMS data needed to track performance was delayed, he said.

In Massachusetts, Atrius Health and Steward Health Care System will continue as Pioneers, representatives for those systems said.

In Wisconsin, Bellin-ThedaCare Healthcare Partners will remain a Pioneer, a spokeswoman confirmed. ACOs operated by the Eastern Maine Healthcare System and the Heritage Provider Network also will stay in the program, their representatives said.

Follow Melanie Evans on Twitter: @MHmevans

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