Healthcare Reform Shocker: 9 ACOs May Leave Medicare’s Pioneer Program

by webadmin on July 3, 2013

UHC-thumbIt wasn’t exactly the shot heard ‘round the world, but yesterday’s breaking news that nine accountable care organizations may bail from  Medicare’s Pioneer program, with some joining the more conventional Medicare shared savings program (MSSP), is having reverberations throughout the industry, Ken Terry of InformationWeek reports.

“The reason is that the Pioneer ACOs, which are among the most advanced healthcare organizations, are expected to take downside risk — meaning they can lose money — sooner than the ACOs in the MSSP, which have only upside risk — meaning they share savings but not losses — for the first three years,” he writes. “So the departure of nearly a third of the Pioneers would raise some questions about the viability of the government’s plan to get providers to take financial responsibility for care.”

However, Tom Cassels of healthcare-oriented The Advisory Board Co., is dismissive of this news, telling Terry it isn’t “terribly significant. For one thing, he noted, the Pioneer ACOs also have risk contracts with commercial payers, self-insured employers, and Medicaid plans. So their departure from the Pioneer program doesn’t mean that they’re shifting back to a fee-for-service system.”

Cassels believes these decisions were probably made because of the organizations’ Medicare populations and “the complexity of managing those populations with the levers they had available to them… [A]ny provider organization that takes financial risk needs three tools to succeed: care management, network management, and plan management. While CMS’ ACO programs encourage the use of care management tools, they allow Medicare beneficiaries in ACOs to see any providers they want, which means that the ACOs lack control over their networks.”

Another area that may be influencing the organizations’ decision is the way in which CMS is benchmarking quality data, with revisions still in the “talking” phase. Terry adds that these Pioneer participants were also frustrated with “the six-month lag in the Medicare claims data that CMS was giving them.” While sharing data has its benefits, Cassels is also dismissive of the usefulness in combining claims and clinical data.

On a final note, he emphasized the experimental nature of ACOs. Given the “steep learning curve…in moving to this form of care delivery from ‘reactive sick care,’ it’s clear that not everybody will make it.”

Regardless, this is a pretty significant development as the impact of reform continues to reveal itself. As healthcare executives, what are your thoughts? Is the Pioneer program ultimately unmanageable for organizations? Will Medicare see more defections to its standardized program? How does this information relate to your organization?

-by Pete Fernbaugh

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