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Report: Two More Medicare ACOs Drop out of Pioneer Program

November 5, 2015
by Rajiv Leventhal
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Two more accountable care organizations (ACOs)—Steward Health Care System and Mount Auburn Hospital’s physician network, both in Massachusetts—have dropped out of the Centers for Medicare and Medicaid Services' (CMS) Medicare Pioneer ACO program, the Boston Globe reported on Nov. 3.

With their departures, the Medicare Pioneer program is now down to 16 participants as half of its original 32 members have left. The Lebanon, N.H. based Dartmouth-Hitchcock Medical Center ACO informed CMS that it was dropping out of the program in September.  

The Pioneer ACO program began in 2012, and according to CMS data from August, in 2014, 15 out of the then-20 Pioneer ACOs (75 percent) generated some savings in 2014, meaning that 25 percent of those in the Pioneer program generated no savings last year. What’s more, 11 organizations generated savings outside a minimum savings rate and earned shared savings payments of $82 million. However, of the five Pioneer ACOs that generated losses in 2014, three generated losses outside a minimum loss rate and owed shared losses. These ACOs are paying CMS $9 million in shared losses.

As part of the July/August 2014 Healthcare Informatics cover story on ACOs, leaders from both Steward and Mount Auburn were interviewed on their experiences and challenges in the federal program. Both organizations, in addition to other Medicare ACOs interviewed for the story, agreed that the initial challenges facing ACOs on the strategic, operational, and IT fronts were inevitably daunting, but also felt that steady progress was being made.

Nonetheless, according to the Globe report, both Steward and Mount Auburn will drop from the Pioneer program, but will join a similar federal program, CMS’s Next Generation ACO Model, set to begin on January 1, 2016. ACOs in the Next Generation ACO Model will take on greater financial risk than those in current Medicare ACO initiatives, while also potentially sharing in a greater portion of savings. Indeed, the Globe report mentioned that according to the two organizations, “the rules make it more financially attractive to them than the earlier program,” referring to the Next Generation model.

The Globe further reported that Mount Auburn Hospital’s physician network saved about $14 million over three years in the Pioneer program, but it expected to lose money under new rules that reduced the budget it would have received to care for patients, according to Barbara Spivak, M.D., president of the Mount Auburn Cambridge Independent Practice Association, the doctors group affiliated with Mount Auburn Hospital.

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