Eleven of 23 Pioneer ACOs earned financial bonuses that totaled $68 million during the program's second year, while three faced penalties. Performance on quality improved for 28 of 33 measures.
In the Shared Savings Program, 53 of 204 organizations with available data slowed spending enough to receive bonus payments that totaled more than $300 million. One will face a penalty of $4 million.
Medicare started with slightly more than 110 ACOs in 2012 and now contracts with nearly 350 hospitals and health systems. The launch and operation of Medicare ACOs has been somewhat rocky. In June, the Brookings Institution released eight proposed policy changes.
New York's Montefiore Medical Center ACO will keep $13 million of $24.5 million it saved last year in the Medicare 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.
Banner Health's Pioneer ACO will keep $9 million of the $15 million it saved during its second year in the program. Chuck Lehn, CEO of the Phoenix-based system's ACO, said Banner is pleased with its progress.
But Sharp HealthCare in San Diego recently said it would exit the Pioneer program, following nine other participants that withdrew at the end of the first year. The largest player in the Shared Savings Program—insurer Universal American—has backed out of several of its ACO ventures that struggled to produce a return.
The CMS introduced proposed changes to ACO quality reporting in July and is expected to release new rules for ACOs soon. It proposes offering ACOs a new bonus based on quality improvement.
Follow Melanie Evans on Twitter: @MHmevans