Despite early successes for the Medicare Pioneer Accountable Care Organization (ACO) program, four more hospital systems recently dropped out, leaving just 19 of the original 32 organizations, according to an article in the Wall Street Journal.
Michigan's Genesys PHO, Indiana's Franciscan Alliance and Pennsylvania's Renaissance Health Network all left the program within the past week, according to the article. They join the nine facilities that left the program last year, complaining of strict rules and benchmarks after failing to meet their performance goals, the WSJ reported. In August, Sharp Healthcare, a San Diego-based health system, dropped out, AJMC reported.
Their exit comes barely a week after the Centers for Medicare & Medicaid Services announced that the Pioneer ACOs and the Medicare Shared Savings Program (MSSP) generated over $372 million in total program savings for Medicare ACOs.
Although Genesys PHO lowered Medicare spending by $20 million, it wasn't enough to meet the national spending benchmark, costing the organization money overall, Michael James, president and CEO of the ACO told the WSJ. "We improved utilization, we improved quality and we lowered our costs but we couldn't make the economic model work," he said.
The same thing happened to Franciscan Alliance. "Overall, our Pioneer ACO received a quality score rating of 83.7 percent. While this is indicative of strong performance, we did not do as well in meeting our benchmark for reducing the costs of patient care. Therefore, the ACO will not receive a shared savings payment from Medicare for the 2013 year," Jennifer A. Westfall, regional vice president for organization, said in a statement, Healthcare Informatics reported.
The organization plans to join the MSSP instead, as does Franciscan Alliance, according to WSJ.
CMS reported last year 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. Only two Pioneer ACOs had shared losses totaling approximately $4.0 million, FierceHealthcare previously reported.
Although ACOs are meant to create savings long-term, and not necessarily on an annual basis, first-year expenditures were lower than projected for 54 of the 114 ACOs that began in 2012, FierceHealthcare reported. Of those 54, more than half--29--generated savings of more than $126 million. These ACOs also generated $128 million in savings for the Medicare Trust Funds.