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What Does the Downshifting of Some of Medicare's Pioneer ACOs Really Mean?

July 17, 2013
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Is the glass half-empty or half-full when it comes to the July 16 announcement by CMS of problems within the Pioneer ACO Program?

The announcement on July 16 on the part of the Centers for Medicare & Medicaid Services (CMS) that nine of the 32 patient care organization collaboratives currently participating in the Pioneer ACO Shared Savings Program were changing status wasn’t entirely unexpected. Indeed, throughout the spring, rumors had percolated up via grapevines and in anonymously attributed quotes in the healthcare press that some of the accountable care organizations established through the Pioneer ACO program were struggling.

Indeed, way back in March of this year, under the headline “Pioneer ACOs threaten to drop out over measures dispute,” an Advisory Board Company article reported that “Most of CMS’s Pioneer ACOs are threatening to leave the program if the agency does not accept their recommendations for quality measures used to determine performance and pay in the program, according to a letter obtained by Inside Health Policy.” Among the areas of contention for the leaders of the Pioneer ACOs threatening to vacate the program, according to the Advisory Board article, which quoted a letter sent to CMS at that time: “More data is needed: 19 of the 31 measures use flat-percentage benchmarks without anchoring methodology because there is insufficient data, according to the Pioneers.” Second, “Benchmarks are too high: The Pioneers say proposed benchmarks are higher than standards established in commercial contracts and in Medicaid, making them difficult to meet. They urge CMS to set more realistic goals. And third, “Medicare Advantage is not comparable: The Pioneers do not want to benchmark their metrics against the Medicare Advantage program,” as the letter obtained by the Advisory Board stated.

These were indeed legitimate and serious concerns. And now, a little over four months later, nine of the Pioneer ACOs have actually made a move, with seven of the Pioneer organizations shifting to the “regular” Medicare Shared Savings Program (MSSP), and two of the organizations quitting the program altogether. The two leaving the program altogether, as confirmed by this writer, are Texas Health Resources (Arlington, Tex.) and Presbyterian Health Services.

The agency did note, however, that all 32 Pioneer participant organizations did well on reported quality measures and earned incentive payments for their quality achievements, though only 13 produced enough savings to share some of that money with CMS. Those 13 yielded gross savings of $87.6 million in 2012, saving about $33 million for Medicare.

Now here is where that trusty old metaphor comes in very, very handy: is this a “glass half-full,” or a “glass half-empty,” moment? I can already envision our readers lining up on either side of the aisle on this one. But let’s peel the layers of the onion a bit here, to mix metaphors in the same paragraph (!). On the one hand, real progress has been made and documented in the Pioneer ACO program, no question about it. And it has been made by every single one of the participating organizations. And that is something to celebrate.

On the other hand, the progress being made is less robust than many (certainly many at CMS, I’m certain) had hoped; and that shows the long path ahead towards truly actualizing the vision of accountable healthcare that leaders in the U.S. healthcare industry have been hoping to move towards in a rapid, clearly demonstrated way.

What particularly intrigues me about all this is the outcomes measures being used in the program. As the leaked March letter to CMS noted, Pioneer participant organization leaders were deeply concerned both that the benchmarks were set too high in the program, and that the benchmarks themselves were too vague to be entirely useful. And ultimately, whatever happened between CMS officials and the Pioneer leaders, CMS’s reassurances to providers weren’t sufficient enough to keep nine of the 32 Pioneer organizations in the program.

Of course, the “negative Nancys” in healthcare (to borrow a phrase that a colleague of mine loves to use) will most assuredly pounce on this development to condemn the Pioneer ACO program altogether; some may even go so far as to say that accountable care is an unrealistic or even illusory dream. For myself, I would say that this is clearly a “lesson learned” moment for accountable care in this country, and hopefully, all the stakeholders on all sides of this will indeed learn from it, and CMS will strengthen the program, perhaps modifying its outcomes measure requirements in order to bring more organizations into the program, while giving them the support needed to be successful over the long haul.

In short, I’m going to vote for “glass half-full” in this instance, and I’m going to invoke the famous quote from the English poet Robert Browning, “Ah, but a man’s reach should exceed his grasp, or what’s a heaven for?” he wrote nearly 200 years ago. Indeed, Mr. Browning, indeed.