Ups and downs for Pioneer ACO program

The Patient Protection and Affordable Care Act has aimed to revolutionize the U.S. healthcare system in order to minimize the cost of care and improve the quality of medical services. While much of this focus has been on boosting patients' experiences with their care providers through greater transparency, accountability and access, healthcare reform legislation is also working to benefit the nation's doctors with lower costs and more efficient care practices.

Emphasis on health information technology systems has begun to offset the rising costs of care, especially as devices like electronic health records become widely used by healthcare organizations. HIT allows doctors and care professionals to streamline operations related to diagnostics, prescriptions, billing, sharing patient medical histories and communicating with patients remotely. In addition to fueling HIT adoption, federal healthcare reform legislation has established accountable care organizations designed to provide comprehensive and coordinated care for patients. The goal of overarching care from ACOs is to work around the expensive pay-per-service model. Based on recent data, ACO initiatives seem to be having success – though not without some bumps along the way.

CMS highlights successes of ACOs
According to Healthcare IT News, the Pioneer ACO program was established nearly one year ago under the auspices of the Centers for Medicare and Medicaid Services. After the initial year of the three-year trial ACO run, the CMS reported that these groups were able to keep costs from increasing at the same pace as they had in years past, benefiting the 669,000 Medicare and Medicaid recipients working with the program.

Out of the 32 healthcare organizations volunteering for the Pioneer ACO program, the whole group was able to keep their healthcare costs increasing by just 0.3 percent in 2012. By comparison, costs jumped up by 0.8 percent in the year prior. Thirteen ACOs were also able to save enough money to share some of the proceeds with the CMS, returning about $33 million to Medicare based on gross savings of $87.6 million.

"These results show that successful Pioneer ACOs have reduced costs for Medicare and improved the quality of care for their patients," CMS administrator Marilyn Tavenner said 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."

Troubles with certain ACO participants
While this data from the CMS is certainly encouraging about the benefits of the Pioneer ACO program, not all of the initiative's participants reaped the same level of rewards. Reuters reported that seven of the 32 Pioneer ACO groups have decided to opt out of the program two years ahead of completion.

The reasoning behind these moves is due to the fact that they were not able to achieve desirable savings as part of the Pioneer program. Fourteen of the ACOs were unable to generate any savings at all, and two organizations actually had to pay $4 million back to Medicare.

However, the seven departing ACO groups will not be out of the program entirely. The U.S. Department of Health and Human Services noted that these seven groups will be shifting to another Medicare program that is more financially stable than the Pioneer ACO initiative. Two other ACOs have decided to leave the federal program altogether.

"This is a very significant transformation for organizations to undertake and it is hard," Jordan Battani, a managing director of CSC Global Healthcare Group, told the news source. "It's hard to do what they are trying to do. All of them have been able to demonstrate quality and outcomes success. And most were able to demonstrate some improvement in the cost structure. Some saw a lot of improvement. A few did not meet the cost target."