Pioneer ACO Program Awaits New Rules

CMS may release as soon as this summer new rules for Medicare's gainsharing programs and a decision on whether to launch a second round of Pioneer ACO participant recruitment.

The Pioneer Accountable Care Organization Model program, one of the most ambitious federal value-based healthcare delivery initiatives, is at a crossroads.

Since launching in 2012 with 32 inaugural participants, the program has dwindled to 23 pioneers. The first year of gainsharing data shows more pain than gain for early Pioneer ACO participants.

Now federal officials appear poised to inject some energy into the initiative, with new rules in the works designed to optimize the program and a second round of participant recruitment on the horizon.

The Pioneer ACO program is one of two gainsharing Medicare payment models; the other is the Medicare Shared Savings Program. From the healthcare provider perspective, the former is a higher risk proposition than the latter.

In the Pioneer ACO program, providers can gain revenue for delivering value, but they lose revenue if they fall short of the program's accountable care standards. The level of gainsharing for MSSP participants is relatively low, but there is no risk of losing revenue through the program.

"Pioneer doesn't have a one-sided gainshare approach. You have up and downside risk," says Nyum Gandhi, a partner at Oliver Wyman Group based in Chicago. "Most of the commercial models and even MSSP are upside only. That's why people view MSSP as a learning opportunity. There's low risk."

He says the relatively high-risk nature of the Pioneer ACO program was a major reason that several of the organizations dropped out. "The majority dropped into MSSP, which has a little less upside and no downside," he says.

The Pioneer ACO program is best suited for hospitals, health systems, and physician organizations that have laid the groundwork for the switch from fee-for-service healthcare delivery to a value-based approach, Gahndi says.

His Pioneer ACO clients have a positive long-term view of the program. "The first year is for them to learn. They're not really looking for a lot of shared savings in the first year."

They probably wouldn't have found it. Last summer, the federal Centers for Medicare & Medicaid Services released early data on the gainsharing results from the Pioneer ACO program showing that 13 out of the 32 pioneer ACOs produced shared savings with CMS in 2012, generating a gross savings of $87.6 million.

Providers Not Impressed
In an April 17 letter sent to CMS on proposed rule changes to Medicare's gainsharing programs, the American Hospital Association urged the federal agency to sweeten the deals by "[ensuring] that more ACOs are able to receive a bonus – and a larger bonus – so that they can continue to invest in the program," the AHA letter states.

Ashley Thompson, vice president and deputy director of policy at the AHA, says the Pioneer ACO and MSSP programs are promising, but need to be revised if they are going to "survive and thrive into the future."

"We see ACOs as a path to move forward," Thompson says. "There's a lot of experimentation out there. The Pioneer ACO is one of those of experiments. I don't know whether it has the scope to become the leading or dominant model. It's too early to tell."

A CMS spokesperson says the agency is committed to building up its accountable care initiatives: "The Affordable Care Act offers new ways to identify and test new models of care that realign payment incentives that increase the quality of care for patients and also keep costs in check. We intend to continue testing accountable care organizations to give doctors, hospitals and other healthcare providers new ways to manage to deliver care within federal health programs in innovative and cost-effective ways."

CMS declined to provide a timeline for the release of new rules for Medicare's gainsharing programs. Gandhi and others expect that the new rules and a decision on whether to launch a second round of Pioneer ACO participant recruitment will likely come no later than this summer.

They cite pressure on the agency to make changes in the program well ahead of the beginning of the next program year on Jan. 1, 2015.

Participant Perspectives
Whether they have realized gainsharing revenue yet or not, several active Pioneer ACO participants are bullish on the program and looking forward to 2015.

Officials at Newton, MA-based Atrius Health said they lost a little revenue in the program in 2012 and gained a little revenue in 2013, but both results were not considered statistically significant. "For 2014, we expect to have more statistically significant savings," the officials said in a statement.

Atrius said participating in the Pioneer ACO program has generated benefits for the organization beyond gainsharing. "The first two years of the Pioneer ACO program engaged our clinicians and staff in better care for our patients and brought us in closer alignment. We have already seen coordinated care improvements and a decrease in our utilization trends," they said.

Lebanon, NH-based Dartmouth-Hitchcock Medical Center officials said they were able to generate gainsharing revenue in their first year of participation in the Pioneer ACO program, and they are optimistic about the future.

"We were able to achieve positive results in our rate of growth as our expenditures were less than our comparison group, and we were able to report on all quality metrics as required by Medicare," officials said in a statement. "Overall, we are satisfied with our participation and plan to continue participating in 2015."