CMS Results Show Mixed Bag on Early ACO Performance

The Centers for Medicare & Medicaid Services (CMS) published for the first time Wednesday the quality and financial performance for individual Pioneer ACOs for the program’s first and second years.

While the jury on the effectiveness of ACOs is still out, the organization-type has become a buzzword for senior living providers, who say industry players will need to strengthen existing partnerships and create new ones with health care providers in order to thrive in the new health care landscape.

Recently, some continuing care retirement communities (CCRCs) showed their support for such partnerships by crafting proposed legislation that would allow states to create ACOs for seniors in CCRCs with existing Medicare and Medicaid coverage.


But early results are mixed on how Medicare’s first ACO pilots are performing. Three years after CMS launched its Pioneer Accountable Care Organization (ACO) model, the initiative is now down to about 60% of its original participants, with 19 of the original 32 ACOs remaining. 

The latest to call it quits were three health systems last month, with those walking away from the model saying it was “financially detrimental.”

First-year financial results show health spending slowed as much as 7% among some ACOs and accelerated as much as 5% for others.


In the first year, Pioneer ACOs had a small collective impact on slowing total Medicare spending growth, but most Pioneer ACOs saw growth similar to their local markets.

On average, spending was about $20 less per beneficiary per month than it would have been had those beneficiaries not aligned with a Pioneer ACO in the first year. 

Overall, the results reveal an estimated $146.9 million dollar savings to the Medicare program in the first year. 

“The eight Pioneer ACOs that [significantly] reduced spending growth varied in geographic location, size, organizational structure, and average Medicare spending in their markets, suggesting that ACOs can achieve lower spending growth under a range of market conditions and organization structures,” CMS says in a written statement.

In the second year, health spending slowed as much as 5.4% among those that reduced patients’ medical bills and accelerated as much as 5.6% where costs escalated, data show.

The quality performance results reflect performance rates for 32 Pioneer ACOs for Performance Year 1 and 23 Pioneer ACOs for Performance Year 2 across 33 clinical quality measures. 

CMS has previously suggested the model has helped ACOs in the Pioneer initiative generate over $372 million in total program savings, according to data from the U.S. Department of Health & Human Services. 

In 2011, CMS selected 32 ACOs to participate in its Pioneer ACO Model. Administered by the CMS Innovation Center, the Pioneer program was designed to enable provider groups to move more rapidly from a shared savings payment model to a population-based payment model consistent with the Medicare Shared Services Program. 

Access the quality and financial performance results here.

Written by Cassandra Dowell

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