Dartmouth-Hitchcock Medical Center has pulled out of the Medicare Pioneer accountable care organization initiative, which has lost nearly half of its 32 original participants.
The Lebanon, N.H.-based center lost money during the Pioneer ACO initiative, which requires participating providers to repay Medicare for failing to meet performance targets on quality and savings. Dartmouth-Hitchcock CEO Dr. James Weinstein said his system is at a disadvantage under formulas that cost the ACO $3.6 million in its third year.
Pioneer cost-saving targets reward improvement, meaning providers that are the least efficient can make the greatest gains and earn the biggest rewards. But his system already operated efficiently. “You're asking organizations that are already running really well to run a two-minute mile,” he said. “It's not possible.”
To create incentives for everyone to improve, the CMS Innovation Center could minimize potential penalties for the most efficient ACOs and limit the potential bonuses for the least efficient, he suggested. Another issue, he said, is that quality performance is not given the same weight as financial savings.
Dartmouth-Hitchcock may enter Medicare's Next Generation ACO program, a new test of the payment model that will begin in January. But Weinstein said that model also has flaws.