It's been one year since the inception of the Pioneer Accountable Care Organization Model, an alternative payment model initiative developed by Centers for Medicare & Medicaid Services, and already the ACOs have demonstrated marked success in providing better coordinated care to beneficiaries at lower costs.
CMS reported Tuesday on the promising outcomes from the first performance year of the Pioneer ACOs, which include 669,000 beneficiaries. According to the report, costs for these patients aligned to Pioneer ACOs increased by 0.3 percent last year in comparison to the 0.8 percent cost increases for similar beneficiaries not aligned to the ACO model.
Moreover, more than 40 percent (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.
Seven of the 32 that did not produce savings have notified CMS that they intend to apply to another ACO model.
Pioneer ACOs earned over $76 million by providing coordinated care, officials point out. Two of the 32 ACOs reported shared losses totaling approximately $4.0 million. Program savings were driven, in part, by reductions that Pioneer ACOs generated in hospital admissions and readmissions, CMS officials say. Groups that have signed on with the model include Allina Health, Banner Health, Dartmouth-Hitchcock, Partners HealthCare and Sharp Healthcare, among others.
"These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients," said CMS Administrator Marilyn Tavenner, in a CMS press statement. "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."
In terms of improving care quality, CMS data also shows these ACOs proving their prowess. All 32 ACOs successfully reported on 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 also performed better than published rates in fee-for-service Medicare for eight clinical quality measures.
Examples of the high quality care provided by the Pioneer ACOs include:
•Readmissions. Some 78 percent of the ACOs generated lower risk-adjusted readmission rates for their aligned beneficiaries than the benchmark rate for all Medicare fee-for-service beneficiaries.
•Blood pressure control. Pioneer ACOs performed better on clinical quality measures that assess hypertension control for patients. The median rate among Pioneer ACOs on blood pressure control among beneficiaries with diabetes was 68 percent compared to the comparison value of 55 percent as measured in adult diabetic population in 10 managed care plans across seven states from 2000 to 2001.
•Cholesterol control for diabetes patients. Pioneer ACOs performed better on clinical quality measures that assess low density lipoprotein control for patients with diabetes. The median rate among Pioneer ACOs for LDO control among beneficiaries with diabetes was 57 percent compared to 48 percent in an adult diabetic population in 10 managed care plans across seven states from 2000 to 2001.
Medicare spending has slowed in recent years and is projected to continue a slower incline over the next few years, according to a Medicare Trustees Report published earlier this year.
Moreover, in 2012, readmissions for Medicare patients decreased significantly, with an estimated 70,000 readmissions avoided due to a variety of new incentives for hospitals to keep patients well and avoid these costly events.