By Dena Bunis, CQ HealthBeat Managing Editor
July 16, 2013 -- The first-year report card for the Medicare Pioneer Accountable Care Organizations (ACOs) shows that more plans saved money than lost, but also that some providers have decided to either exit the program or take a step back and move to the less risky traditional shared-savings model.
The Pioneer ACO model was designed for more advanced, higher-performing organizations. The 32 provider groups that signed up to be Pioneers agreed to generate more savings than traditional shared-savings ACOs. Some of the Pioneers also agreed to take on more risk. The upside was if they met their savings and care benchmarks, these providers would get a larger return on that effort.
After one year, the Centers for Medicare and Medicaid Services (CMS) released performance results on Tuesday. They show that of the 32 Pioneers, 18 had savings and 14 generated losses in 2012. Of the 18 that saved money, 13 had a high-enough savings margin that they will get money from Medicare. Of the 14 that generated losses, two plans that had agreed to take on more risk had high-enough losses that they will owe Medicare money.
Two Pioneers—which CMS officials have not yet named—have decided to drop out of the ACO program. Seven other Pioneers want to transition into the traditional shared-savings program, which has more modest goals and doesn’t require the providers to risk losing money if they don’t meet the shared savings requirements.
Overall, CMS reported that for the more than 669,000 Medicare beneficiaries who belong to Pioneer ACOs, costs to treat them grew by 0.3 percent in 2012. That compares with costs for similar beneficiaries outside the ACO model, which grew by 0.8 percent. CMS said the Pioneers that produced shared savings netted $33 million for the Medicare Trust Funds and that those ACOs together shared in more than $76 million as a result of their coordination of care.
CMS attributed part of the savings to reduced hospitals admissions and readmissions.
Paul Ginsburg, president of the Center for Health System Change, was impressed that the Pioneers could get good first-year results despite the challenge of slow overall spending growth. A champion of the ACO model as a bridge between traditional fee-for-service Medicare and the Medicare Advantage managed care program, Ginsburg did acknowledge that the slower rate of health care spending may well have made it easier for the Pioneers to achieve the shared savings goals.
He remains bullish on the ACO model and said expectations should not have been too high for this first year. (CMS has not yet released the results of the first-year performance for the traditional shared savings ACOs. Officials said those findings would be released later this year.)
“I wasn’t expecting much in the first year,” Ginsburg said in an interview Tuesday. “It’s really a testimony that these organizations were able to put in place some delivery changes. These things are hard to do and they take time.”
Ginsburg also said that he wasn’t concerned about the seven provider groups that plan to step back into the traditional ACO model.
“They are still trying to do this,” he said, and what he hears from out in the field is that many people haven’t been realistic about what it will take to truly achieve accountable care.
Sticking With It
Atrius Health in Massachusetts is one of the two Pioneers that lost money in 2012. But Emily Brower, executive director for the company’s accountable care program, said the company is taking the long view and sticking with the program.
“This is a five-year program for us,” Brower said in an interview. “We have been making investments deep into the local practices that we believe will pay off. We understood that there was a possibility that we would have losses in the first year.”
Brower said Atrius serves the full spectrum of Medicare beneficiaries. That includes about 30,000 in the Pioneer ACO; 50,000 in Medicare Advantage; small numbers of patients in traditional fee-for-service and in commercially insured plans; and some who are dually eligible for Medicare and Medicaid.
“Our Pioneer work is part of a broader strategy to improve care for the Medicare population,” she said, pointing out that Atrius scored above the Pioneer median when it came to quality measures. “That’s something you need to sustain,” she said. “The costs will probably move up and down in the program but we really wanted to build the quality side of performance and we’re very happy that we’ve achieved that.”
Getting Out
Presbyterian Health Services in New Mexico is one of the two Pioneers that is dropping out of the Pioneer program and not asking to join the traditional shared savings ACO.
“New Mexico has historically been a low-cost and low-utilization environment, which resulted in fewer opportunities to achieve savings in the Pioneer ACO model,” the company said in a statement. “ We have chosen to focus our efforts on our current accountable care model of managing the risk of our health plan members and in developing partnerships with employer groups. The Pioneer ACO population of 12,000 was very small compared to our Medicare Advantage population of 36,400 and the nearly 300,000 lives we manage under full risk contracts.
“We will continue to work with CMS and [the Center for Medicare and Medicaid Innovation]—as well as other partners committed to improving quality and lowering costs—as opportunities arise to ensure our patients and members have access to consistently excellent and efficient healthcare,” the statement added.
Stepping Back
Physician Health Partners, based in Denver, is one of the Pioneer ACOs that is applying to step back into the traditional program.
“We’re 100 percent committed to the ACO model,” said Abby Brookover, spokeswoman for the group, which serves about 25,000 Medicare beneficiaries. She explained in an interview that Physician Health Partners are all primary care doctors. Because the group is not affiliated with a hospital system or specialist group, managing the population has been challenging.
“Our population was already healthy,’’ she said, so achieving the high level of savings called for as quickly as the Pioneer program demanded was a little difficult.
“In just one year it was hard to do,” she said. “A lot of the quality measures are things that are more long term.” So they decided to move to a model where the “goals are a little more modest and savings can play out over time.”
Seton Health Alliance in Austin, Texas, is another Pioneer that wants to step back to the regular ACO program.
“In its first 18 months of operation, the Alliance met its quality targets and made substantial improvements to the efficiency of care,” Greg Sheff, the group’s president and chief medical officer, said in a statement. The alliance serves about 10,000 Medicare recipients.
“This is going to give them a little more flexibility,” Seton spokeswoman Adrienne Lallo said in an interview. “It gives them the opportunity to continue to build the infrastructure without the downside risk of failing to meet benchmarks.”
Blair Childs, senior vice president of public affairs for Premier, an alliance that represents hospitals, characterized the Pioneer program as a learning experience. Premier is a trade group that’s not in the ACO program.
“From the provider point of view, the Pioneer program is extremely ambitious, even for the most advanced health systems,” Childs said in a statement. “Participating providers ramped up at impressive speeds to meet the challenge of the Pioneer program, making necessary investments in ACO infrastructure, [health information technology], governance and care delivery models, all of which involves a high degree of risk.”
At the American Medical Group Association, another trade association, its president and CEO Don Fisher also urged patience.
“As with any ambitious effort of this scale, the movement to value-based, coordinated care for patients is an evolutionary process,” Fisher said in a written statement. “Programs like the ACO initiatives will take many years to mature.”
While the results were mixed when it came to savings, CMS reported that all of the Pioneers met the reporting requirements for 15 clinical quality measures, such as readmissions, blood pressure control and cholesterol control for diabetes patients. That success entitled all the Pioneers, CMS officials said, to incentive payments.
Besides Seton Health Alliance and Physician Health Partners, the other Pioneers that plan to either leave the ACO program or step down to the traditional one: Prime Care Medical Network Inc.; University of Michigan; Plus (North Texas Specialty Physicians and Texas Health Resources); Healthcare Partners Nevada; Healthcare Partners California; JSA Care Partners, and Presbyterian Healthcare Services.
Dena Bunis can be reached at [email protected].
