Medicare ACOs improve quality, have mixed results on slowing spending, CMS says

In the Medicare Shared Savings Program, which launched two waves of ACOs in April and July 2012 and a third in 2013, 53 of 204 organizations with available data slowed spending enough to receive bonus payments that total more than $300 million. One will face penalties of $4 million after health spending accelerated.

The CMS released performance results (see chart) for individual ACOs in the shared-savings program late Tuesday afternoon.

Since its start in 2012, accountable care organizations have proliferated in the public and private market. Medicare started with slightly more than 110 ACOs in April and July of 2012. The agency adds new ACOs each January. It now contracts with nearly 350 organizations.

The launch and operation of Medicare ACOs has been somewhat rocky, exposing flaws that some experts and providers worry will undermine participants' ability to succeed. In June the Brookings Institution released eight proposed policy changes without which ACOs face unpredictable and increasingly unattainable incentives, researchers said.

Montefiore Medical Center's ACO will keep $13 million of $24.5 million saved last year in the Pioneer program, said Dr. Andrew Racine, Montefiore's chief medical officer. The organization continues to invest in primary and preventive care to reduce complications and prevent hospitalizations among the chronically ill, he said.

Banner Health's ACO, another Pioneer, will keep $9 million of the $15 million it saved during its second year in Medicare's Pioneer program. Chuck Lehn, CEO of the Phoenix-based health system's ACO, said ongoing investments to bolster primary care and care coordination helped to produce the results.

Lehn described Banner's experience as positive, but not everyone has felt that way. Sharp HealthCare recently disclosed it would exit the Pioneer program, following in the steps of nine other participants that withdrew at the end of the first year.

The largest player in the Medicare Shared Savings Program—insurer Universal American—has backed out of several of its ACO ventures that struggled to produce a return.

The CMS introduced possible changes to ACO quality reporting in July and is expected to release new proposed rules for ACOs soon. The draft changes to quality measures, which would take effect in 2015, are more aggressive than 33 measures used to date. The CMS proposed new measures and called for the removal of others to shift oversight toward the outcome of quality-improvement efforts and away from the process ACOs follow to produce those results. ACOs would be required to meet performance targets for 37 quality measures.

The CMS also offered ACOs a new bonus based on quality improvement.

Follow Melanie Evans on Twitter: @MHmevans

(This article was updated with a correction on Dec. 12, 2014. The story had incorrectly described the results as those for ACOs launched in 2012. The results also include ACOs that began in 2013.)