Risks, rewards of Shared Savings vs. Pioneer ACO

With the first round of accountable care organizations via the Center for Medicare & Medicaid Innovation underway, the next batch still is considering whether to sign up, some with hesitation because of  the risk models under the federal programs.

The earlier program, Pioneer ACOs, which launched in January, assume more risk but also can reap greater rewards than the Medicare Shared Savings Program (MSSP) ACOs, which started last month. Although the two programs both require at least 15,000 beneficiaries and will be measured on the same 33 quality metrics, the two ACO models differ in payment arrangements, beneficiary assignment and benchmarks, according to a white paper from actuarial and consulting firm Milliman.

First, regarding payment arrangements, Pioneer ACOs function like the MSSP ACOs for the first two years, but Pioneers later transition to a population-based payment approach.

Second, MSSP ACOs use prospective assignment of beneficiaries at the onset, whereas Pioneers use prospective assignment for members who had at least a year of fee-for-service coverage; Pioneers also have the option for retrospective assignment.

Third, both models use three-year historical claims data as its benchmark methodology. However, MSSP ACO benchmarks use expenditures for beneficiaries historically aligned with an ACO, whereas Pioneer ACOs include prospective alignment of beneficiaries.

Even with very detailed explanations in hundreds of pages of CMS final rules for ACOs, some providers may see the risks outweighing the benefits. Only 3 percent of surveyed physicians said they are participating in ACOs, although 5 percent reported they plan to become involved in the coming year, according to a Medscape survey this month. Fifty-two percent of physicians believe it will reduce income, they said.

For more information:
- check out the Milliman report (.pdf)

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