The Department of Health & Human Services announced on Monday that 32 healthcare systems have been selected to participate as Pioneer Accountable Care Organizations. The initiative will encourage primary care doctors, specialists, hospitals, and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.
The Pioneer ACO is an accelerated version of the original shared savings ACO program. It was developed after organizations experienced with coordinating patient care and managing risk complained that the ACO program was too stringent in its design. "We weren't happy with the original ACO program because it didn't allow for any flexibility," John Hensing, MD, executive vice president and chief medical officer for Banner Health Network, told HealthLeaders Media. "With the Pioneer program, we were able to negotiate the exit strategy and risk-sharing terms we needed to make the program work for us. Now we're excited to play a role in what we think is a transformative time in healthcare."
Organizations named to the Pioneer ACO program come from 18 states and include large independent practice associations, integrated delivery systems, and physician-based and hospital-based teams that represent 860,000 Medicare beneficiaries. More than 160 letters of intent were received for the program, which ultimately attracted 80 applicants.
In addition to Phoenix-based Banner Health, other Pioneer ACOs include Atrius Health, an independent physician group with offices in central and eastern Massachusetts; Brown & Toland Physicians in the San Francisco area; Franciscan Health System in Indianapolis; and Physician Health Partners in the Denver area.
"Pioneer ACOs are leaders in our work to provide better care and reduce health care costs," said Kathleen Sebelius, HHS secretary, at the press conference held to announce the Pioneer ACOs. "We are excited that so many innovative systems are participating in this exciting initiative—and there are many other ways that health care providers can get involved and help improve care for patients."
The Pioneer ACO model will test a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the ACO shared savings program. In year three of the program, Pioneer ACOs that have shown savings over the first two years will be eligible to move to a population-based payment model that is intended to replace some or all of the ACO's fee-for-service payments with a monthly payment.
The contracts require that more than 50% of all patients in an ACO move to global payment–type contracts by the third year.
Gene Lindsey, CEO of Atrius Health, said his physician groups looked at the shared savings ACO but like the Pioneer model better because it is more focused. Atrius Health will begin with 26,000 participating ACO patients and expects to grow that number to 40,000 participants within three years. His group hopes to leverage what it learns in the Medicare program to develop a commercial ACO.
Five groups in the Boston area were named Pioneer ACOs. Lindsey believes that public acceptance of the ACO concept will be higher as a result, adding, "I expect we'll share information, especially best practices, and develop learning collaboratives."
The first performance period for Pioneer ACOs will begin Jan. 1, 2012.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
