More Medi­care Pi­o­neer ACOs head for the hills

Modern Healthcare - - NEWS - By Melanie Evans

Three more ac­count­able care or­ga­ni­za­tions have dropped out of the Medi­care Pi­o­neer demon­stra­tion, sug­gest­ing that even more so­phis­ti­cated health sys­tems may be un­will­ing to take losses as part of test­ing new pay­ment and de­liv­ery mod­els in Medi­care.

The CMS con­firmed last week that Fran­cis­can Al­liance in In­di­anapo­lis, Ge­nesys PHO in Flint, Mich., and Re­nais­sance Health Net­work in Wayne, Pa., were ex­it­ing the pro­gram, now in its third year. The de­par­tures leave the pro­gram with 19 par­tic­i­pants, down from 32 orig­i­nally.

Ge­nesys PHO will re­pay Medi­care $1.9 mil­lion be­cause the ACO failed to hold down spend­ing dur­ing the sec­ond year, CEO Michael James said. The Pi­o­neer model failed to ad­e­quately ad­just for the sever­ity of pa­tients’ poor health, he said.

The for­mula also dis­counts the role that so­cio-eco­nomic fac­tors in a low­in­come com­mu­nity play in health, he added. His or­ga­ni­za­tion will ap­ply to par­tic­i­pate in the Medi­care Shared Sav­ings ACO pro­gram.

Jen­nifer West­fall, re­gional vice pres­i­dent for the Fran­cis­can Al­liance Ac­count­able Care Or­ga­ni­za­tion, said her ACO did not get to share any sav­ings in the Pi­o­neer pro­gram’s sec­ond year and an­tic­i­pates no bonus in the third year, which prompted the or­ga­ni­za­tion to leave. It also plans to join the Shared Sav­ings Pro­gram.

Re­nais­sance Health Net­work did not re­spond to a re­quest for com­ment.

Eleven Pi­o­neer ACOs earned bonuses in the pro­gram’s sec­ond year, with sav­ings that ranged from $1.2 mil­lion to $13 mil­lion. Six gen­er­ated losses and will be re­quired to re­pay Medi­care.

The mean score on mea­sures of qual­ity in­creased to 84% from 73% among the 23 ACOs in year two.

Some ex­ec­u­tives have crit­i­cized Medi­care’s for­mu­las for re­ward­ing ACOs as skewed in fa­vor of en­ti­ties op­er­at­ing in mar­kets that have aboveav­er­age health spend­ing, where hos­pi­tals and doc­tors have eas­ier op­por­tu­ni­ties for sav­ings.

The CMS re­cently an­nounced that its Medi­care ACO demon­stra­tions over­all saved Medi­care $817 mil­lion through 2013. Dozens of par­tic­i­pants shared $445 mil­lion of that amount, but three-quarters of ACOs did not re­ceive bonuses after fail­ing to meet cost tar­gets.

In an ar­ti­cle pub­lished Sept. 17 in JAMA, Dr. Pa­trick Con­way, di­rec­tor of the CMS In­no­va­tion Cen­ter, and other CMS of­fi­cials said that the loss of Pi­o­neer par­tic­i­pants has raised con­cerns for them but that the pro­gram is yield­ing valu­able lessons for ACO de­vel­op­ment.

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