Reform Update: Pioneer ACOs face July 15 decision deadline

Medicare Pioneer accountable care organizations have until the end of the business day July 15 to inform CMS officials whether they plan to remain in the program for a second year. Also next week, the CMS is supposed to offer results of the program's first year, details about year two, and the names of those Pioneer participants that won't continue.

As many as nine of the 32 Pioneers may opt out of the program, as the CMS has indicated that four of those participants want to switch to a different, less demanding Medicare ACO program, the Shared Savings Program, while another five have sent letters of intent for the next year of the Shared Savings Program, allowing them to keep their options open.

The Pioneer program is Medicare's most ambitious test of the ACO model, involving provider systems that have the most experience in managing population health. They receive bonuses if they meet quality and cost benchmarks and losses if they fail to do so. Shared Savings ACOs don't initially face losses for failing to meet targets. The program was established as part of the Patient Protection and Affordable Care Act, under the new Center for Medicare and Medicaid Innovation.

CMS officials say they expect any Pioneers that exit the program to move into another shared savings model. But whether that will happen remains unclear. Blair Childs, senior vice president of public affairs at Premier Healthcare Alliance, said he heard from one Pioneer participant who plans to make a decision Friday. Childs said some of those nine Pioneers might end up staying in the program.

“The initial goal with the Pioneers was that they weren't intending to have as many as they got,” Childs said. “I don't think this is in any way a diminution in the movement that is going on in healthcare, which is a movement toward population health management by healthcare providers.”

Still, Childs said he hopes the CMS will show some flexibility in the program. As he explained, some Pioneers who leave the program might not shift into the Medicare Shared Savings Program because of some of the MSSP's existing rules. For instance, Childs said that in order to join the Medicare Shared Savings Program, participants must use their taxpayer identification number, rather than their Medicare Provider Identification, or MPI, number—which presents a problem if not all doctors want to join the ACO.

“If you're a large physician group and some of the physicians don't want to participate, you can't participate,” he said. “You may have some drop out of Pioneer and then not join MSSP because of this rule.”

A new analysis from HealthPocket—a free website that compares and ranks all health plans available to individuals families and businesses— this week found that currently insured consumers who select the lower-cost bronze and silver health plans under the Affordable Care Act can expect to pay an average of about 34% more in out-of-pocket costs for their medications than under current individual and family policies, if current cost trends continue. The analysis is based on publicly available, qualified rate filings in California, Connecticut, Ohio, Oregon, Rhode Island, Washington and Vermont. HealthPocket said it's important for consumers to be careful when selecting their plans. “I think for any consumers that take medications regularly, it will be very important for them to look at their health plan's coverage of their drugs, and then examine the cost-sharing,” Kev Coleman, head of research and data at HealthPocket, told Modern Healthcare. “Then compare that with other plans in their area.” The report said there are two other facts about drug costs that are important to note within the analysis: Many plans apply the deductible against drug costs so that the full price of drugs must be paid by the enrollee until the deductible is met, and also that people whose income is either at or below 250% of the federal poverty level will qualify for cost-sharing reductions if they choose a silver plan. According to Coleman, the researchers did not calculate how many people will be eligible for cost-sharing reductions and reductions in out-of-pocket costs.

Calling the Obama administration's decision to delay only the employer mandate provision under the Affordable Care Act “unfair and indefensible,” House Speaker John Boehner (R-Ohio) said in a July 11 news conference that the House will vote next week to delay both the employer and individual mandates under the law. The lower chamber will vote on Rep. Todd Young's (R-Ind.) Fairness for American Families Act to delay the law's individual mandate and Rep. Tim Griffin's (R-Ark.) Authority for Mandate Delay Act to postpone implementation of the employer mandate. The legislation is not expected to go anywhere in the Senate.

In an eight-page letter to the CMS, the American Hospital Association weighed in on the agency's recently proposed rule on Medicaid DSH allotment reductions. AHA Executive Vice President Richard Pollack said the proposed rule would not discourage Medicaid expansion in the states, nor would it cause “undue harm” to hospitals in states that have decided not to expand or have yet to make that decision. Pollack also gave a strong endorsement the DSH Reduction Relief Act of 2013 that would delay both Medicaid and Medicare DSH cuts for two years.

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