Google+
Quote
NAVIGATION
PNHP RESOURCES

HHS moving forward with Pioneer ACO model

Affordable Care Act payment model saves more than $384 million in two years, meets criteria for first-ever expansion

HHS.gov, May 4, 2015

Today, an independent evaluation report released by the Department of Health and Human Services showed that an innovative payment model created as a pilot project by the Affordable Care Act generated substantial savings to Medicare in just two years. Additionally, the independent Office of the Actuary in the Centers for Medicare & Medicaid Services (CMS) has certified that this patient care model is the first to meet the stringent criteria for expansion to a larger population of Medicare beneficiaries.

The independent evaluation report for CMS found that the Pioneer Accountable Care Organization (ACO) Model generated over $384 million in savings to Medicare over its first two years – an average of approximately $300 per participating beneficiary per year – while continuing to deliver high-quality patient care. The Actuary’s certification that expansion of Pioneer ACOs would reduce net Medicare spending, coupled with Secretary Sylvia Mathews Burwell’s determination that expansion would maintain or improve patient care without limiting coverage or benefits, means that HHS will consider ways to scale the Pioneer ACO Model into other Medicare programs.

“This is a crucial milestone in our efforts to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people,” said HHS Secretary Sylvia M. Burwell. “The Affordable Care Act gave us powerful new tools to test better ways to improve patient care and keep communities healthier. 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.”

Pioneer ACOs are part of the innovative framework established by the Affordable Care Act to move our health care system toward one that rewards doctors based on the quality, not quantity, of care they give patients. HHS earlier this year announced the ambitious goal of tying 30 percent of Medicare payments to quality and value through alternative payment models by 2016 and 50 percent of payments by 2018.

http://www.hhs.gov/news/press/2015pres/05/20150504a.html

****

Association of Pioneer Accountable Care Organizations vs Traditional Medicare Fee for Service With Spending, Utilization, and Patient Experience

By David J. Nyweide, PhD; Woolton Lee, PhD; Timothy T. Cuerdon, PhD; Hoangmai H. Pham, MD, MPH; Megan Cox, MHA; Rahul Rajkumar, MD, JD; Patrick H. Conway, MD, MSc
JAMA, May 4, 2015

During Pioneer ACOs’ first 2 performance years, total spending for 1 481 970 aligned beneficiaries increased approximately $385 million ($280 million in year 1; $105 million in year 2) less than spending of similar FFS beneficiaries. A large portion of the smaller increase in spending was from decreases in inpatient utilization among ACO-aligned beneficiaries, although greater decreases in primary care evaluation and management office visits, and smaller increases in the use of tests, procedures, and imaging services, also were related to the observed differential changes in spending. There was no difference in all-cause readmissions within 30 days of discharge, but follow-up visits after hospital discharge increased more for ACO-aligned beneficiaries. Beneficiary reports of care experiences were similar to both the general FFS and Medicare Advantage populations in the first performance year and may have been better in terms of timely care and clinician communication.

Although such success may be replicable in regions with varying market characteristics, not all ACOs did well fiscally—one-third of Pioneer ACOs did not generate lower expenditure growth relative to their comparison populations in their first 2 years, and 2 generated significantly higher expenditure growth their second year. Multiple factors may contribute to these findings. It may take more time for some ACOs to redesign care delivery and learn how to effectively manage the care of a population of FFS Medicare beneficiaries to realize smaller increases in spending. CMS may also need to reexamine specific design elements to facilitate better performance, such as expenditure benchmarking methodologies that are more predictable to the ACO or enhanced benefits and other tools to engage beneficiaries. Reducing Medicare spending through the Pioneer ACO model, then, likely depends on an array of market, organizational, programmatic, and physician-related factors that should be better understood in future implementation and research.

For individual Pioneer ACOs, the results of this difference-in-differences analysis differ from the results that determine whether they share in savings with CMS. The latter results were derived from reconciling the ACO’s projected and actual spending levels as part of their financial incentive to participate in the model, whereas the primary goal of this analysis was to assess the performance of Pioneer ACOs on a set of key spending and utilization outcomes compared with such outcomes in the absence of the intervention. This study does not address other important concerns such as the degree to which the Pioneer ACO model can sustain small increases in spending and high quality performance over longer periods or whether Pioneer ACOs can achieve a meaningful return on investment for the resources they devote to improving care. These results are also limited to Pioneer ACOs and do not include other types of Medicare ACOs.

http://jama.jamanetwork.com/article.aspx?articleid=2290608

****

Accountable Care Organizations and Evidence-Based Payment Reform

By Mark McClellan, MD, PhD
JAMA, May 4, 2015

The study by Nyweide et al in this issue of JAMA is the most comprehensive to date on the association of Medicare’s Pioneer ACO program with spending and beneficiary experience with care. Because beneficiaries cannot be randomized to a Pioneer ACO, the authors compared annual changes among beneficiaries assigned to the ACOs with changes among beneficiaries in the same region who were not in an ACO or a Medicare Advantage plan.

In the first year, the spending difference was largely attributable to fewer physician encounters and hospital admissions; in the second year, reductions in “preventable” hospitalizations for complications that may be affected by ambulatory care were more important.

These early results may be viewed as modest. The smaller increase in spending amounted to 4% in year 1 and less than 1.5% in year 2 (though the 2 estimates do not appear statistically different). The estimates do not account for the shared-savings payments to the ACOs, which totaled $77 million in 2012. Nor do they account for the investments of time and money made by the health care organizations.

http://jama.jamanetwork.com/article.aspx?articleID=2290607

****

Pioneer ACO Evaluation Findings from Performance Years One and Two

L&M Policy Research, March 19, 2015

From “Results at a Glance”

  • Pioneer ACOs saved a total of $384 million over the first two performance years; most of these savings accrued in the first performance year ($279.7 million in the first performance year [2012]; $104.5 million in the second performance year [2013]).
  • Total spending relative to local markets varied for the 32 individual Pioneer ACOs:
    •   Ten Pioneers had statistically significant savings in both performance years.
    •   Ten Pioneers had statistically significant savings in only one of the two performance years; two of these Pioneers had significant losses the other year.
    •   Twelve Pioneers had no statistically distinguishable savings or losses.
  • Pioneer ACO features explored to date—including hospital relationships, ability to follow beneficiaries across the care continuum, and ACO leadership—do not appear to explain the differences in Pioneer ACOs’ spending performance in the first two years of the model. Provider engagement activities suggest some relationship with Pioneer ACOs’ performance. These findings may be attributable, in part, to the somewhat limited variation in observed structural characteristics that can be measured consistently from available qualitative data across all Pioneer ACOs.
  • Overall spending performance was mainly accompanied by utilization reductions in acute inpatient settings. As a group, Pioneer ACO results showed lower-than-expected utilization in acute inpatient stays and physician services in the first and second performance years compared to local markets. The 10 Pioneers with savings in both performance years had particularly steep reductions in acute inpatient stays.
  • Pioneer ACOs collectively had per-beneficiary-per-month savings in 2012 relative to near markets on physician services, inpatient hospital, hospital outpatient, skilled nursing facility, home health, hospice, and durable medical equipment services. However, the magnitude of savings in these settings was lower in 2013.
  • Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys of aligned Pioneer beneficiaries found that Pioneer ACOs exhibited few changes in patient experience between the first and second performance year. In addition, most ACOs have similar levels of performance to one another in the domains we examined. There appears to be little relationship between savings and high or low CAHPS scores.
  • Pioneer ACOs continue to rely largely on internal sources of learning. Although ACO leadership report gaining insights from consultants, commercial payers, and self-insured employers, they find that as innovators, they have more experience within their organizations that they can draw on than from external sources. Pioneers ACOs had the greatest participation in learning system topics related to cost savings, financial data analysis, and quality results/quality reporting/quality improvement.

From “Conclusions”

Descriptive examination of key ACO features did not reveal measured characteristics that appear to be related to ACOs’ two-year spending results. This finding may be attributable, in part, to the somewhat limited variation in observed structural characteristics that can be measured consistently from available qualitative data across all Pioneer ACOs. For those features where we do observe variation, such as relationship with a hospital or whether ACO providers use a single EHR, it appears that they do not explain Pioneer ACOs’ two-year spending results. One suggestive finding is around provider engagement, where ACOs that place more emphasis on engaging providers through incentives and referral management activities may be better positioned to achieve savings. Ongoing collection and analysis of qualitative data may provide additional insights into key operational features or may reveal that other factors, such as market characteristics, are bigger drivers of spending.

http://innovation.cms.gov/Files/reports/PioneerACOEvalRpt2.pdf

****

Comment:

By Don McCanne, MD

Although most reports about the initial experiences with the Pioneer ACO model have been relatively disappointing, nevertheless HHS Secretary Sylvia Burwell in a press release states, “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.”

The release further states, “this patient care model is the first to meet the stringent criteria for expansion to a larger population of Medicare beneficiaries.” HHS intends that, by 2018, 50 percent of Medicare payments will be tied to quality and value through such “alternative payment models.”

This study was done with highly select “Pioneer” organizations that were already geared up to put into place policies intended to accomplish the goal of lower costs without impairing quality. The first year reductions in spending were quite modest and not achieved by many of the ACOs, and the second year savings were only one-third of the first year, questioning whether savings could be sustained. Also a portion of the savings was returned as shared savings rewards, plus the calculated savings did not include the offset of investment of time and money by the health care organizations. A savings for Medicare does not necessarily equate with a savings in health care spending.

The mechanisms of the savings are not clear. With the successful Pioneer ACOs there were fewer hospitalizations and fewer physician visits, but this could represent the fact that the Pioneer organizations were caring for healthier patients. Also it is not clear if the ACOs were truly effective in reducing unnecessary physician visits and hospitalizations, or if they were denying beneficial health care services because of incentives provided for reducing spending.

The JAMA authors write, “Reducing Medicare spending through the Pioneer ACO model, then, likely depends on an array of market, organizational, programmatic, and physician-related factors that should be better understood in future implementation and research.” So we do not know what we are doing, yet HHS is going to shove us into an ill-defined and unproven program which will determine 50 percent of Medicare payments in less than three years from now. And doctors thought SGR was bad!