Pioneer ACOs Announced by CMS

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Mike Cassidy

On December 19, 2011, CMS issued a press release announcing that 32 leading health care organizations across the country will participate in a new pioneer Accountable Care Organization (ACO) initiative.  CMS believes that the pioneer ACO initiative will “encourage” providers to deliver better and more coordinated care and expects that this could save up to $1.1 billion over five years.

CMS describes the pioneer ACO model as an initiative complementary to the Medicare Shared Savings Program designed for organizations with existing experience providing integrated care across a variety of health care settings.  The pioneer model is intended to test the rapid transition to a population-based model of care.

The pioneer initiative model differs from the Medicare Shared Savings Program in the following ways:

  • The first two years of the pioneer ACO model are a shared savings payment arrangement with higher levels of savings and risk than the Medicare Shared Savings Program.
  • Starting in year three of the initiative, those organizations that have earned savings over the first two years will be eligible to move to a population based payment arrangement and full risk arrangements that can continue through optional years four and five.
  • Pioneer ACOs are required to develop similar outcome-based payment arrangements with other payors by the end of the second year.
  • Under the pioneer ACO model, beneficiaries do not enroll in an ACO.  Primary care providers and other health care providers make the decision to participate in ACOs, meaning that beneficiaries will not need to take a proactive action to receive the benefits offered through an ACO.  Although ACOs are required to notify beneficiares of the ACO participation, insuring the beneficiary is aware of the new arrangement, but the beneficiary maintains complete freedom to visit any health care provider accepting Medicare.