Health Care Law Blog
Accountable Care Organizations (ACO) are still a relatively new concept in the healthcare world. ACOs emerged in 2011 as a result of an initiative by the Centers for Medicare & Medicaid Services (CMS), as we documented in our blog articles ACO Regulations Finally Released, Braving the New Frontier of Accountable Care Organizations, and Final ACO Regulations are Released - Is this the Beginning of a New Era for Health Care?
While what exactly is an ACO is still kind of nebulous, ACOs generally are groups of doctors, hospitals, and other health care providers, who voluntarily join forces for the purpose of providing coordinated care to Medicare patients. The goal of ACO’s coordinated care is to ensure that patients, especially the chronically ill, receive the correct care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. ACOs that achieve cost saving from providing timely and accurate care that meet quality benchmarks share in Medicare savings. Lofty and worthy goals, no doubt.
But, there have been bumps in the road. In 2013, we shared Pioneer ACOs Find Blazing New Trails Isn't Always Easy; a report that indicates up to nine of the 32 Pioneer ACOs had decided to, or were contemplating, leaving the program. All nine did, in fact, depart.
For the first time, we now have access to some hard data that sheds light on Pioneer ACO performance. CMS released both financial and qualitative data for the first two years of the program. According to the Modern Healthcare article “CMS posts long-awaited Pioneer ACO quality and financial results”, the results are mixed; however, there is reason for optimism about the program.
First year financial results show that spending slowed by as much as 7 percent at some ACOs, while it increased as much as 5 percent at others. In year two, spending slowed by as much as 5.4 percent and increased as much as 5.6 percent. With regard to the nine ACOs that dropped out of the Pioneer program after the first year, all saw an increase in health spending. Four more Pioneers dropped out after the second year.
According to a CMS press release Pioneer Accountable Care Organizations succeed in improving care, lowering costs, the financial trends are positive:
Costs for the more than 669,000 beneficiaries aligned to Pioneer ACOs grew by only 0.3 percent in 2012 whereas costs for similar beneficiaries grew by 0.8 percent in the same period. 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 over $76 million by providing coordinated, quality care. Only 2 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.
Qualitative data was also released. Data for the first year is available here - Pioneer Accountable Care Organization Model Performance Year 1 (2012) Quality Report, and for the second year here - Pioneer Accountable Care Organization Model Performance Year 2 (2013) Quality Results.
The CMS summarized Pioneer ACO quality as follows:
All 32 Pioneer ACOs successfully reported quality measures and achieved the maximum reporting rate for the first performance year, with all earning incentive payments for their reporting accomplishments. Overall, Pioneer ACOs performed better than published rates in fee-for-service Medicare for all 15 clinical quality measures for which comparable data are available.
Given the results, it's too soon to declare winners, losers and future prospects for the program. But one thing is clear: ACOs remain an important component of the future of healthcare. And with the program still in its infancy, these results provide opportunities for learning and improvement.
For more information about how ACOs may affect your practice, please contact Nicole E. Stratton, Foster Swift Collins & Smith, PC at nstratton@fosterswift.com or 517.371.8140.
