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HHS Announces $284 Million Saved in Pioneer ACO Program After Two Years

May 4, 2015
by Mark Hagland
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After two years in existence, the Pioneer ACO program chalks up $384 million in savings

After two years in existence, the Pioneer Accountable Care Organization (ACO) program has saved the Medicare program $384 million in total, or $300 per Medicare beneficiary per year. Participating providers saved Medicare $279.7 million in 2012 and $104.5 million in 2013. That amount of savings was announced on the website of the Department of Health and Human Services (HHS), and came via an independent evaluation report released May 4 by HHS. What’s more, as the announcement noted, the independent Office of the Actuary in the Centers for Medicare and Medicaid Services (CMS) has certified that the Pioneer ACO program is model “is the first to meet expansion to a larger population of Medicare beneficiaries.”

According to the announcement, “The independent evaluation report for CMS found that the Pioneer Accountable Care Organization (ACO) Model generated over $384 million in savings to Medicare over its first two years – an average of approximately $300 per participating beneficiary per year – while continuing to deliver high-quality patient care. The Actuary’s certification that expansion of Pioneer ACOs would reduce net Medicare spending, coupled with Secretary Sylvia Mathews Burwell’s determination that expansion would maintain or improve patient care without limiting coverage or benefits, means that HHS will consider ways to scale the Pioneer ACO Model into other Medicare programs.”

Reacting to the development, HHS Secretary Sylvia Mathews Burwell was quoted in the online announcement as saying, “This is a crucial milestone in our efforts to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people. The Affordable Care Act gave us powerful new tools to test better ways to improve patient care and keep communities healthier. The Pioneer ACO Model has demonstrated that patients can get high quality and coordinated care at the right time, and we can generate savings for Medicare and the health care system at large.”

The Pioneer ACO Model, one of the first payment models launched by CMS, gives experienced health care organizations accountability for quality and cost outcomes for their Medicare patients. Doctors and hospitals who form Pioneer ACOs can share in savings generated for Medicare if they work to coordinate patient care, keep patients healthy and meet certain quality performance standards, or they may be required to pay a share of any losses generated.

Currently, more than 600,000 Medicare beneficiaries are assigned to Pioneer ACO organizations.

The announcement touted the fact that Medicare beneficiaries enrolled in Pioneer ACOs, on average, “report more timely care and better communication with their providers; use inpatient hospital services less and have fewer tests and procedures;  have more follow-up visits from their providers after hospital discharge.” The announcement also noted that the Pioneer ACO program’s evolution harmonizes with broader federal efforts, including with Secretary Burwell’s goal of tying 30 percent of Medicare payments to quality and value through alternative payment models by 2016 and 50 percent to such models by 2018.

Reacting to Monday’s news, the Charlotte-based Premier Inc. released a statement, attributed to Blair Childs, senior vice president for public policy for the nationwide health alliance. “Today’s announcement proves that innovative care delivery models such as the Pioneer ACO  program are effective at generating cost savings, while simultaneously improving quality and beneficiary satisfaction with care,” Childs said. “For more than a decade, members of the Premier alliance have been national leaders implementing payment and delivery reforms that improve quality while safely reducing costs.”

Still, Premier’s Childs said in the statement that, “While we support the desire to expand the Pioneer ACO program through track 3, as described in the Medicare Shared Savings Program (MSSP) proposed rule, we believe important changes need to be made, including:

  • Strengthen the assignment process by allowing Medicare beneficiaries to attest to participation in ACOs;
  • Establish a more appropriate balance between risk and reward, including higher shared savings for high-quality providers and a period where risk can be phased in over time;
  • Modify the current benchmark methodology to mitigate the impact on ACOs that lower expenses and achieve savings, and to allow ACOs to decide how to best account for regional and local cost trends;
  • Employ a risk-adjustment methodology that truly takes into account  an individual beneficiary’s acuity;
  • Adopt payment waivers to eliminate barriers to care coordination; and
  •  Provide more comprehensive and timelier data on ACOs’ patients.”

Healthcare Informatics will continue to update readers as further developments emerge in this area.







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