California Healthline Daily Edition

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Two California ACOs Exit CMS’ ‘Pioneer’ Demonstration Project

Two Southern California accountable care organizations are among the nine participants that are dropping out of CMS' "Pioneer" ACO demonstration project, Payers & Providers reports (Shinkman, Payers & Providers, 7/18).

Background on Pioneer Program

The Pioneer program is one of the Affordable Care Act's signature initiatives to produce better care at a lower cost.

Under the Pioneer program, which launched in January 2012, participating providers contracted with CMS to meet quality targets and assume new risk when caring for a set population of Medicare beneficiaries (California Healthline, 7/3).

All 32 ACOs in the program improved the quality of patient care in the first year of the program, but only about one-third lowered costs by enough to generate shared savings, according to data released Tuesday by CMS (California Healthline, 7/17).

Calif. ACOs Leaving Program

The two California ACOs exiting the program are:

On Wednesday, HealthCare Partners said it plans to transition to CMS' shared savings demonstration project.

Industry experts say the ACOs' decision to leave the program is the result of:

  • Financial difficulties; and
  • Complications inherent in trying to boost care delivery and patient satisfaction while lowering costs.


Peter Boland -- a health care consultant who focuses on formulating ACO structures -- said the groups "took a fairly clear-eyed view going into [the Pioneer program], and they decided that the intermediate term risk and return on investment -- it just wasn't there."

Boland said the program is "a good learning exercise" for those involved and will help prepare the groups for "graduated risk arrangement."

Other Calif. ACO Successful

Meanwhile, Brown & Toland Physicians -- another California group participating in the Pioneer program -- has reported savings of $10.6 million in the first year.

Keith Pugilese -- vice president of accountable care and public policy at the ACO -- said the group's focus on transition-to-care was responsible for the savings (Payers & Providers, 7/18).

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