No reprieve

Accountable care organizations in Medicare's Pioneer ACO program failed to win a one-year reprieve from having financial incentives tied to their performance on quality benchmarks.

The CMS made an effort to address the concerns of the 32 organizations chosen for the program, launched in January 2012 as an early and high-profile effort to test and nurture the model. It's unclear whether the agency went far enough to maintain the commitment of the Pioneers, who suggested in a February letter to the CMS Innovation Center that they needed clarity in order to “make informed decisions regarding our ongoing participation.”

In a letter to Pioneers last week, the CMS rejected the ACOs' call to award financial incentives this year based on whether organizations reported quality scores and postpone payment tied to performance benchmarks until 2014. The agency said it would replace “flat percentage” benchmarks with empirically based benchmarks.

The new ones will be based on recently received data and will be proposed soon, according to the CMS letter—the flat-percentage benchmarks were proposed because that data was not available, the letter said. The benchmarks will be applied to Pioneers this year and to another 220 ACOs in the Medicare Shared Savings Program in 2014.

Dr. Stuart Rosenberg, co-chairman of the Beth Israel Deaconess Pioneer accountable care organization, praised the use of Medicare data instead of a flat percentage as a source of quality benchmarks. “The assurance is that it's based on actual results, not an arbitrary number, so you can't argue with the actual results.”

Rosenberg, who also is president and CEO of the Harvard Medical Faculty Physicians, said Pioneers believe their organizations should be held to the highest performance standards, but those standards should be based on data. He praised Marilyn Tavenner, acting administrator for the CMS, and Dr. Richard Gilfillan, director of the Centers for Medicare and Medicaid Innovation, for their personal involvement. Rosenberg declined to comment on his organization's plans for participation.

“What's clear is that CMS is saying we heard you loud and clear and we don't think these flat percentages are good, this is not the way to measure your performance accurately,” said Dr. Kavita Patel, a fellow in economic studies at the Brookings Institution.

But it does raise an important question, Patel said: What will proposed benchmarks look like? “If you're running a Pioneer, you need to know.”

Follow Melanie Evans on Twitter: @MHmevans