Seven ACO Pioneers Drop Out, Others Say It’s the Future

After year one of a pioneer savings program for Accountable Care Organizations, or ACOs, managed under Medicare, seven of the first 13 members will leave the program in favor of another Medicare saving opportunity, due to a lack of cost savings resulting from their participation, CMS has reported. Two more will drop from the ACO program completely.

The first seven participants will instead join Medicare Shared Savings Program. 

The remaining participants did recognize savings under the program, reporting those that were successful improved the quality of care they provided. CMS touted the results following the program’s first year. 


“These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients,” said CMS Administrator Marilyn Tavenner. “The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off.”

Among those departing from the program are Providers Primecare Medical Network, University of Michigan, Physician Health Partners, Seton Health Alliance, Plus (North Texas Specialty Physicians and Texas Health Resources), HealthCare Partners Nevada ACO, HealthCare Partners California ACO, JSA Care Partners and Presbyterian Healthcare Services.

The results were “checkered,” according to Ken Perez, Senior Vice President of Marketing and Director of Healthcare Policy, MedeAnalytics, who provided his take in an op-ed following the announcement


“While it’s certainly true that 13 of the 32 Pioneers succeeded in the first year, generating some shared savings, seven of the ACOs have opted to step down to the less-risky Medicare Shared Savings Program (MSSP) and two have decided to no longer be a Medicare ACO, Pioneer or MSSP,” Perez wrote. “That leaves 10 Pioneers that are still in the Pioneer program, but did not have a successful first year. I’m sure that the providers in those ACOs are adopting a “wait and see” attitude regarding the viability of the model and whether it rewards them sufficiently for their efforts.”

 Perez predicts the second year of the program will be telling for those remaining, as well as those on the sidelines that have opted not yet to join. 

“That fact that only a minority of the Pioneers succeeded in year one will probably deter some organizations from applying to the Pioneer program in the future,” Perez says. “For the 10 Pioneers that did not succeed in the first year but are still in the program, this coming year will be the make-or-break year for them, since shared savings provide the economic engine to reward providers and sustain the ACO model.”

Costs for the more than 669,000 beneficiaries aligned to Pioneer ACOs grew by only 0.3 percent in 2012 where as costs for similar beneficiaries grew by 0.8 percent in the same period, CMS reported on the program’s success. Of those 13 out of 32 pioneer ACOs to produced shared savings with CMS, they generated gross savings of $87.6 million in 2012 and nearly $33 million to the Medicare Trust Funds,” CMS says.

Pioneer ACOs earned over $76 million by providing coordinated, care while the two Pioneer ACOs sharing losses saw a collective shortfall of $4.0 million.

Of those succeeding under the program, UnitedHealthcare Networks said it not only realized savings but projects contracts to more than double in the next four years. 

We are improving health outcomes for patients at lower costs by moving even more broadly to value-based payment models and integrating those with our care provider network, product and clinical strategies,” said Austin Pittman, president, UnitedHealthcare Networks in a statement. “Our unparalleled experience with accountable care models – and there are many – demonstrates that they can work better for everyone in health care, from patients to payers to care providers.”

The company reported $20 million in contracts under the program this year, with projections of $50 million annually by 2017.  

Written by Elizabeth Ecker

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