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Industry Exclusive: Pioneers in Accountable Care

January 26, 2012
by Jennifer Prestigiacomo
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A chat with Richard Gilfillan about how Pioneer ACOs are blazing the trail for others

HCI Associate Editor Jennifer Prestigiacomo recently conducted an online interview with Richard Gilfillan, M.D., director of the Center for Medicare and Medicaid Innovation (the Innovation Center) at the Centers for Medicare & Medicaid Services (CMS) about the Pioneer ACO Model and what challenges he foresees for the future. Here are excerpts from that discussion.

What were the major considerations in choosing the 32 Pioneer organizations?
The 32 organizations were selected based on their significant experience offering this type of quality care to their patients, along with other criteria listed in the Request for Applications (RFA) released in May 2011.
Can you describe how the payment models will work in the first two years?
In the first two performance years, the Pioneer Model tests a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the Shared Savings Program. These shared savings would be determined through comparisons against an ACO’s benchmark, which is based on previous CMS expenditures for the group of patients aligned to the Pioneer ACO.

There were two alternatives to the core payment arrangement suggested by the Pioneers. Which model do you think most ACOs will end up adopting?
ACOs had the option of choosing between five different payment arrangements, all of which are outlined in a document on the Pioneer ACO Model website.  Multiple ACOs opted to pursue each payment option.

What challenges do you foresee that the Pioneers will face in developing similar outcomes-based payment arrangements with other payers?
Changing the way large groups of providers do business is a challenge. Providers also need the collaboration of payers to make outcomes-based arrangements a reality, and some payers may not be ready to take that step. In many instances, however, Pioneer ACOs will have already made these arrangements with at least some of their private insurers.

How will best practices be shared among the Pioneers, and when will the first assessment be done to assess progress?
CMS will be sponsoring extensive shared learning activities designed to help Pioneer ACOs collaborate with one another on successful strategies. These learning activities will include conference calls and webinars, joint improvement work by Pioneers on particular topics, joint “R&D” on innovative strategies, and data sharing to gauge their own and each other's performance.

The organizations participating in the Pioneer ACO Model are among the nation’s leaders in care innovations, and many have made exciting advances in care already. CMS will help to document those advances as they develop, which will feed into a continuing evaluation of the program. In that sense, the first assessment will happen as the program begins. CMS expects the first formal interim evaluation to occur after the first year of the program.

How many organizations do you think are going to sign up for the Shared Savings Program in the next three years?
CMS anticipates anywhere from 50 to 270 participating ACOs.

What do you predict that organizations are going to be focusing this year and next to create ACOs and care coordination outside the Pioneer program?
Each of the ACOs are different organizations, and each will have a different focus. However, we anticipate they all will be taking steps to improve the quality of care beneficiaries receive. Many ACOs will be hiring, or have already hired, additional staff to help provide beneficiaries with the best possible care experience. Others may be improving their information systems, or working with their physicians, nurses, and other providers to build care teams, and gaining the expertise they need to be successful Pioneer ACOs.

It’s important to note that the organizations selected to participate were selected because they’ve been doing this already—many already have important capabilities established.

What are the biggest barriers for organizations to participate in the ACO program? What do you think organizations will have the most challenge with?
Initially, commenters—particularly those who were looking at forming small ACOs, ACOs in rural areas, safety-net providers,  or loose physician networks—were concerned about start-up costs and return on investment, given the upfront costs of ACO formation and operations and anticipated timeline for distributing savings. They were also concerned about transitioning to the program’s two-sided model.

The final rule responded to these concerns by allowing ACOs to participate in the one-sided shared savings only model for their first agreement period and allowing ACOs entering the program in 2012 to opt for interim payment calculation.

The final rule also reduced the number of quality measures ACOs must report, and provides a more gradual transition phase-in from pay for reporting to pay for performance on quality measures. CMS has further reduced the burden of the quality performance standard by financing the first two years of the patient experience of care survey.