Pioneer ACO program saves Medicare $384 million; CMS to expand program

The Dartmouth-Hitchcock Medical Center in Lebanon, New Hampshire, a member of the Pioneer ACO program.

The Pioneer Accountable Care Organization payment model saved more than $384 million in Medicare spending in the first two years of its creation, the Department of Health and Human Services said on Monday, clearing the way for the pilot payment program to expand to other organizations.

The Centers for Medicare and Medicaid Services said the program’s participants saved $279.9 million in 2012 and $104.5 million in 2013, according the Office of the Actuary, an independent division of CMS.

The Pioneer ACO model was the first accountable care model launched by CMS. It included only well-established and financially strong health systems and asked them to share in the risk of receiving payments tied to value over traditional fee-for-service. Pioneer ACOs could share in the savings if they scored high on quality benchmarks, but also could see penalties if care failed to meet certain standards. Due to their status and financial standing, Pioneer ACOs assumed more risk that participants in other ACO programs including the Medicare Shared Savings Program.

[Also: See where the Medicare Shared Savings Program ACOs are]

The MSSP has saved Medicare $417 million, HHS said.

“The Pioneer ACO Model has demonstrated that patients can get high quality and coordinated care at the right time, and we can generate savings for Medicare and the health care system at large,” said HHS Secretary Sylvia Burwell in a statement.

The Pioneer ACO program launched in 2012 with 32 original participants, but concerns over the amount of savings actually generated led many to drop out, leaving only 19 remaining in the program.

The Actuary said the program expansion would give MSSP participants the option of joining a Pioneer model ACO instead of graduating to a Track 2 model, which gives them more flexibility and a chance for deep savings if hospitals show strong quality.

[Also: These 779 hospitals actually scored Medicare bonuses]

“Because several of the design aspects of the Pioneer Model are more attractive to the ACOs, we expect that many ACOs that would have otherwise participated in Track 2 would instead opt for the Pioneer track if it were offered as an additional track under the MSSP. In addition, we believe that the existence of the Pioneer track would lead to an overall increase in beneficiary enrollment in ACOs relative to the current-law baseline,” the Actuary report read.

While CMS is touting the savings to Medicare, in the second year only 11 Pioneer ACO’s qualified for shared savings, splitting just under $70 million between them.

Here’s the full Office of the Actuaryreport.

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