Financial Results from First 2 Years of Pioneer ACO Program Show Mixed Results

Financial results from the first 2 years of the Pioneer ACO Model reveals the gains and losses of the 32 organizations that started the program, and illuminates why just 19 remain.

For the first time since the program began, CMS released the financial results from the first 2 years of the program, which showed mixed results when it came to savings. For example, in the first year, some accountable care organizations (ACOs) reported gross savings of more than $15 million, while others reported gross losses of more than $5 million.

The first year includes results for all 32 ACOs that started the program. After the first year, 9 ACOs had dropped out, all but one of which had reported losses in 2012. Despite savings of more than half a million dollars, University of Michigan chose not to continue participating. Recently, another 4 ACOs have left the program.

Plus! / North Texas ACO, which dropped out of the program after the first year, lost $9.31 million total. However, the ACO did not have to pay shared losses.

The only ACO that had to pay shared losses during year 1 was Genesys PHO. In 2012, the organization reported losses of $5.1 million (—2.9%) and owed shared losses of $2.55 million. In 2013, Genesys improved very little, reporting gross losses of $4.86 million (–2.8%) and owing shared losses of $2.49 million. In September, Genesys dropped out of the program.

Franciscan Alliance also left the program in September despite 6% gross savings and shared savings of $6.67 million in in year 1. However, the ACO did not share in any savings in the second year because it deferred reconciliation until the end of the third year. Franciscan Alliance did not anticipate any bonus for next year.

Other ACOs that chose to defer reconciliation until the end of the performance year 3 were Dartmouth-Hitchcock ACO and Fairview Health Services, both of which are still participating in the Pioneer program.

Another ACO that recently dropped out of the program was Sharp Healthcare, which reported 2 consecutive years of financial losses. In the first year, the ACO reported losses of just —0.3%, and in year 2 of –1.3%. Overall, Sharp reported losses totaling more than $5 million over the 2 years in the Pioneer program.

There are plenty of success stories, however. Montefiore ACO has shared in total savings of $27.41 million over the 2 years of the program. Banner Health Network’s shared savings were $13.37 million in 2012 and $9.22 million in 2013, for a total of $22.59 million.

Partners Healthcare, which shared $7.2 million in savings during year 1 did not share in any savings or losses in the second year. And Beacon Health owed shared losses of $2.89 million in 2013 after sharing in savings of $2.03 million in the first year of the program.

The 13 ACOs that have left the program include: Franciscan Alliance; Genesys PHO; Healthcare Partners of California; Healthcare Partners of Nevada; JSA Medical Group, a division of HealthCare Partners; Physician Health Partners; Plus! / North Texas ACO; Presbyterian Healthcare Services; PrimeCare Medical Network; Renaissance Health Network; Seton Accountable Care Organization, Inc.; Sharp HealthCare ACO; and University of Michigan.