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RiverHealth ACO Drops out of Next Generation ACO Program

February 16, 2016
by Heather Landi
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Just three weeks after it had been selected for the Centers for Medicare & Medicaid Services (CMS) Next Generation Accountable Care Organization (ACO) program, Harrisburg, Pa.-based RiverHealth ACO chose to leave the program because it would not be able to meet the cost targets set by CMS.

Formed in 2012, RiverHealth ACO is a partnership of PinnacleHealth System, also based in Harrisburg, and Williamsport, Pa.-based Susquehanna Health and affiliates and participated in the Medicare Shared Savings Program (MSSP).

On Jan. 11, CMS announced the unveiling of the Next Generation ACO program with 21 ACOs participating. As reported by Healthcare Informatics Editor-in-Chief Mark Hagland, CMS said the Next Generation ACO Model builds upon the experience from the Pioneer ACO Model and the Sharing Savings Program and “offers a new opportunity in accountable care—one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.”

When announcing the new ACO program, CMS officials noted that “The Next Generation Model participants will have the opportunity to take on higher levels of financial risk – up to 100 percent risk – than ACOs in current initiatives. While they are at greater financial risk they also have a greater opportunity to share in more of the Model’s savings through better care coordination and care management.

A statement from PinnacleHealth posted on its website stated that “providers participate in the ACO model to focus on health and wellness, providing additional services to patients with chronic disease conditions and providing better coordination of care while reducing the rate of growth in Medicare costs.”

“While River Health ACO managed the rate of increase in costs to below the national average, projections do not indicate that the ACO would be able to meet the current target set by CMS,” PinnacleHealth said in the statement. In the statement, PinnacleHealth said RiverHealth ACO was leaving the Next Generation ACO program effective Feb. 1.

In January, following the unveiling of the Next Generation ACO Program, HCI’s Hagland wrote that there was hopeful reaction among industry leaders about the newest program and that the Next Generation ACO Program created prospective measures to help guide providers.

White Plains, N.Y.-based Universal American Corp, a healthcare management company, through its subsidiary, Collaborative Health Systems, released a statement at the time confirming that one of its ACOs formed in partnership with primary care physicians, the Accountable Care Coalition of Southeast Texas (ACCSETX), had been chosen by CMS to participate in the Next Generation ACO Program.

During an interview with Hagland, Richard Barasch, chairman and CEO of Universal American, said, “We’re very optimistic that the Next Gen construct is a good one. We think that MSSP will continue to evolve in a positive way. And we expect to continue to be active in the program. And we believe that this Administration, and this is non-political: frankly, this is just common sense—that there will be a movement towards bringing value-based care to the fee-for-service program. It’s in everybody’s interest.”

Collaborative Health Systems is a subsidiary of White Plains, N.Y.-based Universal American Corp., a healthcare management company, and one of Collaborative Health Systems’ ACOs formed in partnership with primary care physicians, the Accountable Care Coalition of Southeast Texas (ACCSETX), was chosen by CMS to participate in the Next Generation ACO Program.


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