Confirmed: Nine Pioneer ACOs will exit program, including University of Michigan Health System

Although the Centers for Medicare & Medicaid Services continues to tout the success of the Pioneer accountable care organizations, the agency confirmed in an announcement today that nine will leave the experimental program.

The agency confirmed that Pioneers are abandoning the program, saying that seven did not produce savings and intend to apply to the alternative ACO model, the Medicare Shared Savings Program (MSSP). Two others have told CMS they are leaving the program completely.

While CMS did not name the nine Pioneer ACOs slated to leave the program in today's announcement, it has dropped nine of the original 32 participants from the list on its website.

And in a separate announcement the University of Michigan Health System (U-M Pioneer ACO) confirmed it is one of the nine and that it will move to a less-risky MSSP model. "We remain firmly committed to the concept of improving healthcare and containing cost growth via the population health model that drives all ACOs," says David Spahlinger, M.D., executive director of the University of Michigan Medical School's Faculty Group Practice. 

CMS now lists only 23 participating Pioneer ACOs out of the original 32. In addition to the University of Michigan Health system, eight others missing from the original list are:

  • Prime Care Medical Network, which serves San Bernadino and Riverside counties in California
  • Denver-based Physician Health Partners
  • The Austin, Texas-based Seton Health Alliance
  • Plus ACO, a partnership between North Texas Specialty Physicians and Texas Health Resources
  • Healthcare Partners Nevada, which serves Clark and Nye counties Nevada
  • California's Healthcare Partners California, serving Los Angeles and Orange counties in California
  • JSA Care Partners, which covers the Orlando, Tampa and South Florida area.
  • Albuquerque, New Mexico-based Presbyterian Healthcare Services

The ACOs had until July 15 to notify CMS of any status change in their participation with the program. They have until July 31 to apply for the shared savings program, according to CMS. 

Commenting on the departure of the nine Pioneer ACOs, Blair Childs, senior vice president of public affairs, Premier Healthcare Alliance, said in an announcement that "dropping from the Pioneer program does not mean that providers are abandoning their investments or wavering on the concept of ACOs. Instead, many are moving from Pioneer to the less risky options in the Medicare Shared Savings Program. Others are not changing to MSSP, in some cases because of the existence of unnecessary regulatory barriers, and are instead applying their ACO investments to private contracts with insurers."

CMS said it remains committed to the Pioneer initiative, a model that encourages providers and caregivers to deliver more coordinated care for Medicare beneficiaries while curtailing costs. The results of the Pioneer model's first year are promising, the agency said.  

"These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients," CMS Administrator Marilyn Tavenner said. "The Affordable Care Act has given us a wide range of tools to realign payment incentives in Medicare and Medicaid, and these efforts are already paying off."

Specifically, CMS reports that:

  • 13 out of 32 pioneer ACOs produced shared savings with CMS, generating a gross savings of $87.6 million in 2012 and saving nearly $33 million to the Medicare Trust Funds
  • Pioneer ACOs earned more than $76 million by providing coordinated, quality care.
  • Only two Pioneer ACOs had shared losses totaling approximately $4.0 million
  • Program savings were driven, in part, by reductions that Pioneer ACOs generated in hospital admissions and readmissions   

Furthermore, CMS said quality measures were also successful, specifically showing improvements in readmission rates, blood pressure control, and cholesterol control for diabetes patients. CMS also highlighted the work of the following Pioneer ACOs that took steps to improve care while lowering costs:

  • Banner Health Network dispatches hospital-trained nurses to patients' homes to do whatever the patient needs, such as managing prescription drugs, and teaching healthy eating habits 
  • Monarch HealthCare ACO offers Care Coordination, a service for beneficiaries who need assistance with coordinating the medications and many care visits associated with having multiple diagnoses.           

In addition, CMS said Pioneer ACOs were rated higher by ACO beneficiaries on all four patient experience measures relative to the 2011 Medicare fee-for-service results.

Banner CEO Chuck Lehn said in a statement that the value-based Pioneer ACO model has merit and it plans to continue as a Pioneer ACO. "It is the best solution at this time for creating sustainability for the Medicare program, and could be the basis for historic change in the U.S. healthcare industry," he said.

To learn more:
- here's the CMS announcement and additional website info
- read the statement from the University of Michigan Health System
- check out the statements from Premier and Banner Health