CMS names ACOs leaving Pioneer program

(This story was corrected on July 25, 2013.)

Several Medicare Pioneer accountable care organizations that didn't produce savings in the first year of the Obama administration's most ambitious test of the accountable care model have told the CMS they will leave the Pioneer program and enter the Medicare Shared Savings Program model, while another two participants have indicated they will leave Medicare accountable care entirely, the federal agency announced Tuesday.

At the same time, the CMS said all 32 Pioneer participants did well on reported quality measures and earned incentive payments for their quality achievements. The Pioneer ACOs bested provider performance in traditional fee-for-service Medicare for all 15 quality measures in which comparable data are available, the agency said.

But while all did well on meeting quality benchmarks, only 13 produced enough savings to share some of that money with the CMS. Those 13 yielded gross savings of $87.6 million in 2012, saving about $33 million for Medicare.

Still, the CMS reported that costs for the nearly 670,000 Medicare beneficiaries connected to Pioneer ACOs grew by only 0.3% in 2012, compared with an increase of 0.8% for matched beneficiaries who did not take part in the Pioneer program.

The CMS said that Primecare Medical Network, University of Michigan, Physician Health Partners, Seton Health Alliance, Plus (North Texas Specialty Physicians and Texas Health Resources), HealthCare Partners Nevada ACO, HealthCare Partners California ACO, JSA Care Partners and Presbyterian Healthcare Services will not continue in the second year of the Pioneer program. Only the University of Michigan earned savings in the first year.

Plus and Presbyterian do not intend to transition into the Medicare Shared Savings Program, Modern Healthcare confirmed in interviews with their executives.

According to the agency's announcement, Pioneer ACOs earned more than $76 million in shared savings through better coordination of care to Medicare patients, while two Pioneer ACOs suffered losses that totaled about $4 million.

Boston-based Partners Healthcare, one of the 32 Pioneers, reported that it slowed cost growth by about 3%, which translated into about $14.4 million in shared savings that Partners received from the Medicare program.

“These results show that it is possible to slow healthcare cost growth, while delivering high quality care,” Dr. Gary Gottlieb, president and CEO of Partners, said in a news release. “We are confident that this Pioneer ACO initiative can provide a blueprint for the rest of the nation to follow.”

Similarly, Banner Health Network in Phoenix released a statement that said Banner leaders were pleased with their first-year results and are now focused on how they can sustain their model in the years to come.

“Our ability to delivered shared savings, in excess of $13 million, has been the result of more coordinated care by our providers, advanced population health technology and surrounding our most vulnerable and chronically ill beneficiaries with supportive case management,” Tricia Nguyen, chief medical officer for Banner, said in a statement.

Don Fisher, president and CEO of the American Medical Group Association, said that an “overwhelming majority” of AMGA's 25 participants in the Pioneer ACO program will continue. “The remainder of the participants will transition to either the equally challenging Medicare Shared Savings Program ACO or will not continue as a CMS-sponsored ACO,” Fisher said in a written statement.

Despite the news that nine Pioneers won't continue in the program for year two, the CMS emphasized the improved quality that Pioneer ACOs provided in the first performance year. For instance, 25 of the 32 participants generated lower risk-adjusted hospital readmission rates for their beneficiaries against the benchmark rate for all Medicare fee-for-service beneficiaries. Pioneer ACOs also performed better on clinical quality measures that assess low-density lipoprotein (LDL) control for diabetic patients. According to the CMS, the median rate among Pioneer ACOs for LDL control among beneficiaries with diabetes was 57%, compared with 48% in an adult diabetic population in 10 managed care plans across seven states between the years 2000 and 2001.

“These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients,” CMS Administrator Marilyn Tavenner said in the agency's announcement. “The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off.”

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(An earlier version of this story incorrectly stated that seven Pioneer ACOs did not produce savings.)