The Results Are In: Year One of Pioneer ACOs

On July 16, 2013, the Centers for Medicare and Medicaid Services (CMS) announced results from the first performance year of the Pioneer Accountable Care Organization Model (the Pioneer Model). The Pioneer Model was designed for health care organizations and providers that were already experienced in coordinating care for patients across care settings. It allowed these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Savings Program. Overall, more than 250 organizations participate in the Pioneer Model and the Medicare Shared Savings Program, serving more than 4 million Medicare beneficiaries. Below are results of year one outcomes for Pioneer ACOs:

1. ACO Savings:

• In 2012, costs for more than 669,000 beneficiaries aligned to Pioneer ACOs grew by only 0.3 percent, whereas costs for similar beneficiaries grew by 0.8 percent.
• Thirteen out of the 32 Pioneer ACOs produced shared savings with CMS, generating a gross savings of $87.6 million in 2012 and saving roughly $33 million for Medicare Trust Funds.
• Collectively, by providing quality and coordinated care, the Pioneer ACOs earned over $76 million, while only two Pioneer ACOs had shared losses totaling approximately $4 million.
• Savings witnessed by the Pioneer ACOs were driven, in part, by reductions generated in hospital admissions and readmissions.

2. ACO Quality:

• All 32 Pioneer ACOs reported quality measures and achieved the maximum reporting rate, with all the ACOs earning incentive payments for their reporting accomplishments.
• In general, Pioneer ACOs performed better than published rates in fee-for-service Medicare for all 15 clinical quality measures for which comparable data was available.
• Examples of high-quality care were witnessed in the following areas:
  • Blood pressure control
  • Cholesterol control for diabetes patients
  • Readmissions

3. Other Results:

• Seven of the 32 Pioneer ACOs did not produce shared savings and have indicated intent to apply to the Medicare Shared Saving Program — another ACO model with more flexibility and lower risk levels. Two of the ACOs indicated they may leave the program completely.
• Pioneer ACOs received higher ratings by ACO beneficiaries on all four patient experience measures relative to the 2011 Medicare fee-for-service results.

McGuireWoods’ health care group counsels clients from all sectors of the health care industry. If you have any questions regarding preparing for an ACO or forming an ACO, please contact one of the authors.