Pioneer ACO Program Ripe for Improvement, Providers Say

As Medicare officials mull new rules and a second round of participant recruitment for the Pioneer ACO program, healthcare providers are quick to point out how the gainsharing model can be improved.

It is far easier to get lost in an alphabet soup of acronyms than it is to find branding genius at a US federal agency.

But officials at the Centers for Medicare & Medicaid Services chose wisely when they picked "pioneer" as the key word for the moniker of their most ambitious gainsharing program. The Pioneer Accountable Care Organization model mirrors the pioneer experience of the 1800s wagon trains in the American West.

Just as the first wagon trains drew strong and ambitious settlers willing to accept the risks of traversing America's new frontier for the promise a brighter future, the CMS program was designed to draw healthcare providers willing to accept the gainsharing program's demands in exchange for potential financial reward.

"The Pioneer ACO Model is designed for healthcare organizations and providers that are already experienced in coordinating care for patients across care settings," the program's website states.

Launched in 2012 with 32 participants, Pioneer ACO is a relatively high-risk Medicare payment program because providers can gain or lose revenue based their ability to deliver value. "The Pioneer project is different because its ACOs are more advanced," says Ashley Thompson, vice president and deputy director of policy at the American Hospital Association.

Pioneer ACOs have faced daunting obstacles on the trail to value-based care delivery. Nine of the inaugural participants have dropped out of the program, with several joining the less-demanding Medicare Shared Savings Program. MSSP allows providers to share value-based gains with Medicare, but they bear no risk of having to share the cost of falling short.

Providers Seek Pioneer ACO Fixes
With several accountable care hurdles cleared, and many more to come, CMS officials and healthcare providers are pondering new Pioneer ACO rules to smooth the road ahead in 2015. Earlier this year, CMS invited comments on new Pioneer ACO rules and the prospects for a second round of participant recruitment. "CMS is asking for ways to grow the program," Thompson says.

While acknowledging "there's still a lot of interest at hospitals and health systems," the AHA official said CMS needs to make changes to Pioneer ACO before a second round of participant recruitment is launched. "There's not this cry out there for every hospital to participate in an ACO," she says. "Pioneer ACO is just not a robust program from our perspective."

A letter the AHA sent to CMS on April 17 urges the federal agency to make changes to Pioneer ACO. Both the AHA and Pioneer ACO participants are seeking changes to the program's gainsharing mechanism.

"The way the Pioneer ACO baseline is calculated, it rewards improvement, not overall quality," says Nyum Gandhi, a Chicago-based partner at Oliver Wyman. "Historically good performers are being penalized."

He says the baseline calculation is a "no-win situation" for CMS. "They're in the business of being the steward of billions of taxpayer dollars. I understand why they did it, but it has caused frustration among providers."

Reforming the Pioneer ACO gainsharing mechanism to make it more lucrative for providers will be necessary to draw more participants to the program, the AHA letter asserts. "The number one way to increase participation in ACO programs is to modify the shared savings determination to ensure that more ACOs are able to receive a bonus—and a larger bonus—so that they can continue to invest in the program," the letter says.

Officials at Newton, MA-based Atrius Health say they have asked CMS to change the gainsharing mechanism on fairness grounds.

"As CMS evaluates the program, we have made recommendations to improve the financial model," the Atrius Health officials said in a media statement. "The model does not [reward] ACOs that were already good stewards of the Medicare dollar prior to the launch of the program. Our first year benchmark was more challenging than other Pioneers in our market since as we already had a long history of providing coordinated and efficient care for these Medicare patients."

In addition to more lucrative gainsharing, the AHA and several Pioneer ACO participants are pushing CMS to improve the flow of data necessary to function effectively in the program. "Hospitals are not getting the data in a significant and timely manner," Thompson said.

Stuart Lockman, who serves as president of the Michigan Pioneer ACO, says receiving timely beneficiary data is essential to containing costs. "We would like to see CMS establish a system to better advise ACOs when their aligned beneficiaries visit out-of-network facilities," he says.

The Promised Land
Barbara Walters DO, who is leading the Pioneer ACO program at Dartmouth-Hitchcock Medical Center in New Hampshire, believes the 1800s wagon train analogy works well, to a point. While she agrees Pioneer ACO participants have been blazing a value-based trail, she says their destination remains far in the distance.

"The Promised Land is a little more difficult to see, as we don't have Moses, the angel Moroni or Allah with rules to guide us," Walters said. "But I would say that we would see an engaged patient population participating in a patient-centered model of healthcare, health and wellness, with all relevant data up-to-date and accessible."

The ideal the ACO model would be "supported by an innovative provider community that is fairly reimbursed in a manner that reflects the appropriate cost of care for the illness burden inherent in their population, rewards effective clinical outcomes, and enhances innovative care model designs across the continuum of care," Walters said.