Carroll said Fairview spent the latter part of 2008 and early 2009 changing the way it delivered care. The seven-hospital system approached commercial payers—Medica, Blue Cross and Blue Shield of Minnesota, HealthPartners and Preferred One—to evolve the model, which included what Carroll called innovation clinics—or primary-care clinics that developed team-based care. Today, all 42 of its clinics are certified as health homes through the state's certification process. And about 53% of Fairview's total revenue—which is about $2.6 billion—comes from the payment structures between Fairview and those commercial plans, a system spokesman said.
In its second of three ACO initiatives unveiled last week, the CMS said it will accept public comments until mid-June on an “advanced payment initiative” for those ACOs entering the Medicare Shared Savings Program. This would test whether paying an ACO a portion of the shared savings up front could increase participation. Those funds would be a pre-payment—similar to a loan—that would have to be reconciled later against the shared savings.
And in the third of the three ACO initiatives, the CMS said it will host four free educational sessions for those interested in becoming an ACO, beginning with the first scheduled for June 20-22 in Minneapolis.
“The most substantive one is the Pioneer program because it wasn't bound by the same statutory requirements for the formal ACO program,” Geisinger's Graf said.
Geisinger was one of the 10 systems in the physician group practice demonstration project from 2005 until 2010. Those organizations are now completing contracts to extend the earlier five-year test for two years. Geisinger won't be applying to be a Pioneer participant because of this commitment, Graf said.
Fairview's Carroll and Chet Speed, vice president of public policy at the American Medical Group Association, cited the larger shared savings as a positive provision in the Pioneer model. According to the CMS, Pioneer model arrangements will have three performance periods, the first lasting from the start date—expected to be in the third or fourth quarter this year—until Dec. 31, 2012. The other periods will last 12 months each.
In the Pioneer application form, the CMS outlined one payment arrangement that the agency plans to pursue, and it also encouraged applicants to suggest others. The proposed payment structure calls for up to 60% shared savings and shared losses for the first performance period, with a Pioneer ACO's share of savings or losses subject to a maximum of 10% of total projected Medicare part A and B expenditures for the organization's patients.
The second performance period calls for up to 70% shared savings and losses with an ACO's share of savings or losses subject to a maximum of 15% of total projected Medicare part A and B expenditures.
By the third period, if the ACO generates a minimum average annual savings—which the agency calculates and details in the application—the ACO's payment will transition to population-based payment. “Population-based payment is a per-beneficiary, per-month payment amount intended to replace a significant portion of the ACO's fee-for-service payment with a prospective payment,” the application said.
“The Pioneer ACO program introduced by the Center for Medicare and Medicaid Innovation is a far-sighted and sensible approach to accelerate the adoption of coordinated care into original Medicare, that will bring better care to beneficiaries,” Donald Crane, president and CEO of the California Association of Physician Groups, said in a statement.