CMS announces participants in Pioneer ACO Model program

CMS provides incentives for accountable care organizations (ACOs) through its Medicare Shared Savings Program, which aims to improve the quality of care for Medicare Fee-For-Service (FFS) beneficiaries while reducing unnecessary costs. But CMS is also testing an alternative model, dubbed the Pioneer ACO Model, to determine the impact of different payment arrangements in helping to reach those same goals.

This week CMS announced that 32 organizations have been selected to participate in its Pioneer ACO Model program. The pioneers will begin their first performance period on Jan. 1, 2012. During the first two performance years, participants will test a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the Shared Savings Program.

By the third year, Pioneer ACOs that have shown savings during the first two years will be eligible to move to a population-based payment model, which would replace some or all of the ACO’s fee-for-service payments with a prospective monthly payment in exchange for providing care for a set number of beneficiaries. The program could be extended for an additional two years based on the performance and preference of the ACO.

Pioneer ACOs are also required to enter into similar performance-based contracts with other payers, such as insurers and employer health plans, with more than 50 percent of the ACO’s revenues being derived from such payment arrangements by the end of performance year two.

CMS will publish performance reports on the Pioneer ACOs based on quality metrics, including patient experience ratings, on its website.