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BREAKING NEWS: Medicare’s Pioneer ACO Program Loses Three More Participants

September 25, 2014
by Rajiv Leventhal and Mark Hagland
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Program began with 32 particpants; now down to 19

Three more accountable care organizations (ACOs) have dropped out of Medicare's Pioneer ACO program, dropping the total to 19, down from the program’s original 32, according to industry news reports and verified sources.

The Franciscan Alliance, Genesys PHO and Renaissance Health Network have exited the program, which is now in its third year. In August, Sharp Healthcare, a San Diego-based health system, dropped out, saying that the ACO model was “financially detrimental.”

This news comes just a week after the Centers for Medicare & Medicaid Services (CMS) announced an estimated total model savings of over $96 million over the program’s two-year span.  Overall, CMS reported that the Pioneer ACO model and Medicare Shared Savings Program (MSSP) have generated more than $372 million in total program savings for Medicare ACOs.

In a statement released on Sept. 25,  Jennifer A. Westfall, regional vice president for the Mishawaka, Ind.-based Franciscan Alliance Accountable Care Organization, said, “In 2011, Franciscan Alliance took the lead in the state of Indiana – and the nation – when we were chosen to pilot the Pioneer ACO program with the Centers for Medicare & Medicaid Services.  With the launch of the Pioneer ACO program in 2012, we began pursuing a quality-centered system of care, focused on providing the most optimal healthcare experience to the Medicare beneficiaries we are fortunate to serve.  We are pleased with the accomplishments we have made in pioneering this new model of care in just a few short years,” Westfall said.

“From increasing the quality of care provided to patients, to documenting better health outcomes and implementing new care programs for our Medicare beneficiaries, we have much to be proud of. Now,” she continued, “as we work to finish out our third performance year in the Pioneer ACO, we have also taken time to evaluate what we have learned from our participation.  Results from 2013, our second performance year (PY2) in the Pioneer ACO, are now available from CMS. Overall, our Pioneer ACO received a quality score rating of 83.7 percent. While this is indicative of strong performance, we did not do as well in meeting our benchmark for reducing the costs of patient care.  Therefore, the ACO will not receive a shared savings payment from Medicare for the 2013 year.”

As a result, Westfall said, “With no shared savings for performance year two and an anticipated similar result for our current performance year, Kevin Leahy, President & CEO of Franciscan Alliance, announced this week that while the board has given thoughtful consideration to our continued participation in the Pioneer ACO model, we have instead decided to explore new care coordination programs offered by Medicare.  With that in mind, we will be officially terminating our agreement with the Pioneer ACO program effective September 26 and have applied to transition to the Medicare Shared Savings Program (MSSP). In the MSSP program,” she said, “we will continue to provide services to many of the same beneficiaries currently attributed to our Pioneer ACO, with the same complex case management team in place to help address their care needs.  And, because we are including a smaller group of providers—Franciscan Physician Network, Indiana Internal Medicine Consultants, and Major Health Partner-affiliated providers—we feel strongly that we will be successful in this venture.”

Healthcare Informatics will keep you posted on this story as it continues to develop.