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Five Massachusetts Organizations Selected to be Pioneer ACOs

May 03, 2012

Shannon Crowley, CPA, MSA

The Centers for Medicare and Medicaid Services (CMS) issued a General Fact Sheet on the Pioneer Accountable Care Organization (ACO) Model, which disclosed the 32 selected organizations participating in the Pioneer ACO Model. Five of the organizations chosen are from Massachusetts: Atrius Health Services, Beth Israel Deaconess Physician Organization (BIDPO), Mount Auburn Cambridge Independent Practice Association (MACIPA), Partners Healthcare and Steward Health Care System. 

What is the Pioneer ACO Model trying to accomplish?
The ultimate goal of an ACO is to improve patient care while reducing costs.  CMS projected that the Pioneer ACO Model could potentially save Medicare more than $1.1 billion over the next five years.

How does the program work for the ACO?
The Pioneer ACO Model officially started January 1, 2012.  During the first two performance years, CMS will establish a budget for each ACO.  The budget is based on the costs to the ACO for caring for each Medicare patient over the past three years plus estimated inflation.  If the ACO is able to save money (reduce Medicare costs by more than the budgeted amount) by providing higher quality care (CMS has established benchmarks to measure quality care), CMS will share a portion of the savings with the ACO. During the third performance year, all ACOs with savings and higher quality care will have the option to change to a population-based payment model, replacing some or all of the ACO’s fee-for-service payment model.  As CMS discloses, this Pioneer ACO Model does present higher levels of rewards and risk than in the Shared Savings Program. The selected ACOs could potentially lose money if Medicare patients need more care than they have in the past or if the care is not properly coordinated.

How do the chosen organizations plan to reach these goals? 
The leadership personnel at each of the chosen Pioneer ACOs have been optimistic and vocal about how they intend to reach the goals of the Model.  In order to be successful, ACOs will need to put more emphasis on post-acute care and enhance overall coordination and communication between hospitals, specialists, primary care physicians and rehabilitation and skilled nursing facilities.  This should result in a higher quality of patient care, while eliminating duplication of services and preventing potential future high-cost hospital services.   

Potential impact.
This new Model will affect many different groups of people and organizations, including an estimated 200,000 or more Medicare patients in Massachusetts.  As the Pioneer ACO Model just rolled out in January, it is impossible to estimate the overall impact.  However, regardless of participation in the Pioneer ACO Model, all healthcare organizations should begin to evaluate how this potential Model is going to affect their organization and their relationship with other healthcare organizations. 


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