CMS posts long-awaited Pioneer ACO quality and financial results

(Story updated at 6:43 p.m. ET.)

The CMS published for the first time the quality and financial performance for individual Pioneer accountable care organizations, a small, select group enlisted for Medicare's most ambitious test of the payment model. First year financial results show health spending slowed as much as 7% (PDF) among some ACOs and accelerated as much as 5% for others. In the second year, health spending slowed as much as 5.4% among those that reduced patients' medical bills and accelerated as much as 5.6% where costs escalated.

Eight of the nine ACOs to walk away from the Pioneer program in the first year reported an acceleration in health spending. Of those that dropped out, seven joined Medicare's less risky ACO option, the Shared Savings Program. But the Pioneer ACO that reported the sharpest acceleration in health spending, Plus North Texas ACO, dropped out entirely after costs grew 5.2% faster than projected.

Individual quality data was also released for the first year (PDF), when ACOs were required to provide performance scores but not required to meet targets for performance. Starting the second year (PDF), any financial payouts from savings are dependent on how well ACOs perform on quality.

Second-year results capture performance for the remaining ACOs.

The published performance for individual Pioneers comes nearly three years after their launch, much longer than observers of the ACO experiment had hoped it would take to release.

The CMS is responsible for publishing Pioneer quality performance on its website, the agency said when it announced the Pioneers. Rules hold Medicare Shared Savings Program ACOs accountable for publishing on their websites data on financial performance and quality measures.

The results detail how Pioneer ACOs performed during their first two years. The first year captures results for all 32 original Pioneer ACOs before nine organizations exited the program because of financial risks and disputes regarding the rules.

Accountable care offers financial incentives to hospitals and doctors to reduce health spending and meet quality targets. Pioneer ACOs that slow spending keep some of what they save. Where health spending accelerates, Pioneer ACOs must cover some of the additional cost. The potential for losses began the first year for some; others opted for a one-year delay.

The ACO model is new but spreading quickly. Medicare has added 340 ACOs to a more modest test of the incentives known as the Shared Savings Program. Policymakers hope the incentives for cost and quality will help to slow health spending, which has historically grown faster than the economy.

Four more Pioneers dropped out after the second year.

The CMS said in a statement the agency “remains committed to leading delivery system reform, with an array of alternative payment models such as the Pioneer ACO model.”

Follow Melanie Evans on Twitter: @MHmevans