Savings from Medicare ACOs, Pioneer ACOs Exceed $380 Million: CMS

Initial financial results for a number of CMS healthcare reform delivery initiatives are positive, with savings from both the Medicare Accountable Care Organizations (ACOs) and Pioneer ACOs exceeding $380 million, according to the CMS.

Interim reports on select Medicare ACO initiatives, an in-depth savings analysis for Pioneer ACOs, results from the Physician Group Practice demonstration, and expanded participation in the Bundled Payments for Care Improvement Initiative all show significant savings and quality improvements, CMS officials say.

Key findings from the report include the following:

Medicare ACOs:

  • In their first 12 months, nearly half (54 out of 114) of ACOs in the Medicare Shared Savings Program (MSSP) in 2012 exceeded their benchmarks.
  • Of these 54, 29 generated shared savings totaling more than $126 million.
  • In addition, these ACOs generated a total of $128 million in net savings for the Medicare Trust Funds.

ACOs share with Medicare any savings generated from lowering the growth in healthcare costs while meeting standards for high quality care. Final performance year-one results will be released later this year.

Pioneer ACOs:

  • Preliminary evaluation of the Pioneer ACO Model — designed for more experienced organizations ready to take on greater financial risk — shows that they generated gross savings of $147 million in their first year while continuing to deliver high quality care.
  • Of the 23 Pioneer ACOs, nine had significantly lower spending growth relative to Medicare fee-for-service (FFS) while exceeding quality reporting requirements. These savings far exceed findings from a previous analysis conducted by CMS, which used a different methodology.

“We are still early on in the program, but are encouraged by these results and are on track to meet our goals for participation in the Pioneer ACO model,” said Dr. Barbara Walters, executive medical director for accountable care, with the Dartmouth-Hitchcock ACO, and a contributor to the Healthcare Intelligence Network (HIN). “Our strategies of using patient outreach and education and regular follow-up for targeted chronic disease programs are allowing us to anticipate patient needs before their health problems become worse. Involvement in the Pioneer model is helping us provide better treatment for our patients across a wide range of health challenges.”

Physician Group Practice Demonstrations:

  • An evaluation report confirmed overall savings over the five-year experience of this initiative with seven out of 10 physician group practices earning shared savings payments for improving the quality and cost efficiency totaling $108 million over the course of the Demonstration.
  • Physician Group Practice Demonstration initiatives, which offered incentive payments for delivering high-quality, coordinated healthcare that generates Medicare savings. The participating organizations consistently demonstrated high quality of care on a broad range of chronic disease and preventive care measures.

Bundled Payments for Care Improvement:

  • CMS announced that 232 acute care hospitals, skilled nursing homes, physician group practices, long-term care hospitals, and home health agencies have entered into agreements to participate in the Bundled Payments for Care Improvement initiative.
  • Bundling payment for services that patients receive across a single episode of care, such as heart bypass surgery or a hip replacement, is one way to encourage doctors, hospitals and other healthcare providers to work together to better coordinate care for patients, both when they are in the hospital and after they are discharged.
  • Through this initiative, CMS will test how bundled payments for clinical episodes can result in more coordinated care for beneficiaries and lower costs for Medicare.

Source: HHS, January 30, 2014

Healthcare Innovation in Action: 19 Transformative Trends

Healthcare Innovation in Action: 19 Transformative Trends examines a set of pioneering efforts supporting the industry’s seismic shift from a volume-based culture to one rewarding value and patient-centeredness, including an ACO engaging specialists in care coordination, and a patient-centered medical home expanding to a medical neighborhood.

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