CMS: Pioneer ACO Program Saved Nearly $400M Over Two Years
Background on Pioneer ACOs
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; in exchange, they received additional financial incentives. The program was designed to reward early adopters of coordinated care models and offer the health industry an example of successful outcomes-based pay models.
However, some participants took issue with the structure of the program. By last year, 10 of the original 32 Pioneer ACOs had dropped out of the program, with some moving into the Medicare Shared Savings Program (California Healthline, 10/9/14).
According to the new data, which were published in the Journal of the American Medical Association, expenditures for Medicare beneficiaries receiving care through Pioneer ACOs increased slower than expenditures for non-ACO, fee-for-service beneficiaries in the program's first two years (Wall Street Journal, 5/4).
Specifically, the data show that CMS saved an estimated $385 million in the first two years of the Pioneer ACO program.
Researchers found that the increase in expenditures from the 2010-2011 baseline for the average beneficiary aligned with a Pioneer ACO was $35.62 less in 2012 and $11.18 less in 2013 when compared with non-ACO, FFS beneficiaries. Overall, the slower spending growth generated about $280 million in savings in 2012 and $105 million in savings in 2013.
Researchers attributed the slower expenditure growth primarily to decreases in inpatient utilizations among beneficiaries aligned with the ACO, as well as:
- Decreases in office visits for primary care evaluation and management; and
- Smaller increases in the number of tests, procedures, and imaging services.
The researchers found no decrease in 30-day readmissions for ACO-aligned beneficiaries but they did note that the number for follow-up visits for discharged patients was higher for the ACO patients
Meanwhile, beneficiaries in the ACOs reported higher satisfaction with clinician communication and timely care than other Medicare beneficiaries.
"These results are encouraging, given how historically challenging it has been for physicians to achieve spending reductions in Medicare demonstration projects," the researchers wrote in JAMA. They added, "Despite decreases in spending growth, results from this study and previously reported data on Pioneer ACOs' performance on clinical quality measures suggest it is possible to reduce expenditure growth while maintaining or improving quality in a FFS payment environment" (Nyweide et al., JAMA, 5/4).
First Certified ACA Alternative Payment Program
The findings by independent actuaries means the Pioneer ACO program is the Affordable Care Act's first alternative payment program to be certified to cut costs while improving quality. As a result, CMS is now authorized to begin rolling out elements of the program nationwide.
Patrick Conway, CMS deputy administrator for Innovation and Quality, said, "There were people, not so long ago, asking if the Innovation Center would ever certify a model," adding, "This allows us to expand components of the Pioneer program nationally" (Wall Street Journal, 5/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.