Affordable Care Act helps 32 health systems improve care for patients, saving up to $1.1 billion

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Room 352-G
200 Independence Avenue, SW
Washington, DC 20201
Office of Media Affairs


FOR IMMEDIATE RELEASE Contact: HHS Press Office
Monday, December 19, 2011 (202) 690-6343


Affordable Care Act helps 32 health systems improve care for patients, saving up to $1.1 billion
Leading health care providers will be Pioneer Accountable Care Organizations

Thirty-two leading health care organizations from across the country will participate in a new Pioneer Accountable Care Organizations (ACOs) initiative made possible by the Affordable Care Act, HHS Secretary Kathleen Sebelius announced today. The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.

Under this initiative, operated by the Centers for Medicare & Medicaid Services (CMS) Innovation Center (Innovation Center), Medicare will reward groups of health care providers that have formed ACOs based on how well they are able to both improve the health of their Medicare patients and lower their health care costs.

“Pioneer ACOs are leaders in our work to provide better care and reduce health care costs,” said Secretary Sebelius. “We are excited that so many innovative systems are participating in this exciting initiative – and there are many other ways that health care providers can get involved and help improve care for patients.”

The Pioneer ACO initiative is just one of a menu of options for providers looking to better coordinate care for patients and use health care dollars more wisely. The Pioneer ACO model is designed specifically for groups of providers with experience working together to coordinate care for patients. The Medicare Shared Savings Program and the Advance Payment ACO Model, both announced in October 2011, are also ACO options for providers. More information about the full menu of options for providers and how to apply to participate is available here.

“We know that health care providers are at different stages in their work to improve care and reduce costs,” said Marilyn Tavenner, acting Administrator of CMS. “That’s why we’ve developed a menu of options for Medicare to meet doctors, hospitals, and other healthcare providers where they are, and begin the conversation of how to enhance the care they are offering to people with Medicare.”
The 32 Pioneer ACOs underwent a rigorous competitive selection process by the Innovation Center, including extensive review of applications and in-person interviews.

The initiative will test the effectiveness of several innovative payment models and how they can help experienced organizations to provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth. These payment models will allow organizations that are successful in achieving better care and lower cost growth to move away from a payment system based on volume under the fee-for-service model, towards one where the ACO is paid based on the value of care it provides.

The Pioneer ACO model requires ACOs to engage other payers in similar efforts to reward health care providers that deliver high-quality care. The Pioneer ACO model also includes strict beneficiary protections, including the ability for patients to seek care from any Medicare provider they wish.
Selected Pioneer ACOs include physician-led organizations and health systems, urban and rural organizations, and organizations in various geographic regions of the country, representing 18 States and the opportunity to improve care for about 860,000 Medicare beneficiaries.

The first performance period of the Pioneer ACO Model will begin January, 1st 2012.
For the final list of participating Pioneer ACOs and more information about the Pioneer ACO Model, a fact sheet is posted at http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4225
or you can visit: http://innovations.cms.gov/initiatives/aco/pioneer

The Pioneer ACO Model is one of several initiatives underway at CMS designed to support the formation of ACOs. For more information, visit www.cms.gov/aco.

For more information about the CMS Innovation Center, visit innovations.cms.gov.

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.


CMS FACT SHEET

FOR IMMEDIATE RELEASE Contact: CMS Media Relations Group
December 19, 2011 (202) 690-6145

Pioneer Accountable Care Organization Model:
General Fact Sheet

The Pioneer ACO Model is a CMS Innovation Center initiative designed to support organizations with experience operating as Accountable Care Organizations (ACOs) or in similar arrangements in providing more coordinated care to beneficiaries at a lower cost to Medicare. The Pioneer ACO Model will test the impact of different payment arrangements in helping these organizations achieve the goals of providing better care to patients, and reducing Medicare costs.

Accountable Care Organizations
Accountable Care Organizations (ACOs) are one way CMS is working to ensure better health care, better health, and lower growth in expenditures through continuous improvement.

The Medicare Shared Savings Program provides incentives for ACOs that meet standards for quality performance and reduce cost while putting patients first. Established by the Affordable Care Act, CMS published final rules for the Shared Savings Program on November 2, 2011. More information is available at www.cms.gov/sharedsavingsprogram.

Working in concert with the Shared Savings Program, the Innovation Center is testing an alternative ACO model, the Pioneer ACO Model. The Innovation Center is also testing the Advance Payment ACO Model, which will provide additional support to physician-owned and rural providers participating in the Shared Savings Program who would benefit from additional start-up resources to build the necessary infrastructure, such as new staff or information technology systems.

More information on all of these initiatives is available on the Innovation Center website at www.innovations.cms.gov.



The Pioneer ACO Model and Selected Organizations

The Pioneer ACO Model was designed specifically for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements. The selected organizations were chosen for their significant experience offering this type of quality care to their patients, along with other criteria listed in the Request for Applications (RFA) document available at www.innovations.cms.gov. These organizations were selected through an open and competitive process from a large applicant pool that included many qualified organizations.

The 32 organizations participating in the Pioneer ACO Model:

Organization Service Area
1. Allina Hospitals & Clinics Minnesota and Western Wisconsin
2. Atrius Health Eastern and Central Massachusetts
3. Banner Health Network Phoenix, Arizona Metropolitan Area (Maricopa and Pinal Counties)
4. Bellin-Thedacare Healthcare Partners Northeast Wisconsin
5. Beth Israel Deaconess Physician Organization Eastern Massachusetts
6. Bronx Accountable Healthcare Network (BAHN) New York City (the Bronx) and lower Westchester County, NY
7. Brown & Toland Physicians San Francisco Bay Area, CA
8. Dartmouth-Hitchcock ACO New Hampshire and Eastern Vermont
9. Eastern Maine Healthcare System Central, Eastern, and Northern Maine
10. Fairview Health Systems Minneapolis, MN Metropolitan Area
11. Franciscan Alliance Indianapolis and Central Indiana
12. Genesys PHO Southeastern Michigan
13. Healthcare Partners Medical Group Los Angeles and Orange Counties, CA
14. Healthcare Partners of Nevada Clark and Nye Counties, NV
15. Heritage California ACO Southern, Central, and Costal California
16. JSA Medical Group, a division of HealthCare Partners Orlando, Tampa Bay, and surrounding South Florida
17. Michigan Pioneer ACO Southeastern Michigan
18. Monarch Healthcare Orange County, CA
19. Mount Auburn Cambridge Independent Practice Association (MACIPA) Eastern Massachusetts
20. North Texas ACO Tarrant, Johnson and Parker counties in North Texas
21. OSF Healthcare System Central Illinois
22. Park Nicollet Health Services Minneapolis, MN Metropolitan Area
23. Partners Healthcare Eastern Massachusetts
24. Physician Health Partners Denver, CO Metropolitan Area
25. Presbyterian Healthcare Services – Central New Mexico Pioneer Accountable Care Organization Central New Mexico
26. Primecare Medical Network Southern California (San Bernardino and Riverside Counties)
27. Renaissance Medical Management Company Southeastern Pennsylvania
28. Seton Health Alliance Central Texas (11 county area including Austin)
29. Sharp Healthcare System San Diego County
30. Steward Health Care System Eastern Massachusetts
31. TriHealth, Inc. Northwest Central Iowa
32. University of Michigan Southeastern Michigan


The Innovation Center
The Innovation Center was created by the Affordable Care Act to test new models of health care delivery and payment. The Center also offers technical support to providers to improve the coordination of care and share lessons learned and best practices throughout the health care system. It is committed to refining the Medicare, Medicaid and CHIP programs to deliver better care for individuals, better health for populations, and lower growth in expenditures.

Payment Arrangement and Beneficiary Alignment
The first performance period begins in January 1st, 2012. In the first two performance years, the Pioneer Model tests a shared savings and shared losses payment arrangement with higher levels of reward and risk than in the Shared Savings Program. These shared savings would be determined through comparisons against an ACO’s benchmark, which is based on previous CMS expenditures for the group of patients aligned to the Pioneer ACO

In year three of the program, those Pioneer ACOs that have shown savings over the first two years will be eligible to move to a population-based payment model. Population-based payment is a per-beneficiary per month payment amount intended to replace some or all of the ACO’s fee-for-service (FFS) payments with a prospective monthly payment.

Additionally, during the application process, organizations were invited to propose alternative payment arrangements. CMS established two alternatives to the core payment arrangement discussed above based on this input. Both of these alternatives follow a shared savings model in years one and two, and provide an option for a partial population based payment that removes limits on rewards and risks in year three. These arrangements will allow Pioneer ACOs more flexibility in the speed at which they assume financial risk.

Under the Pioneer ACO Model, CMS will prospectively align beneficiaries to ACOs, allowing care providers to know at the beginning of a performance period for which patients’ cost and quality they will be held accountable.


Beneficiary Protections and Quality Measures
Providing the beneficiary with a better care experience is one of the central focuses of the Pioneer ACO Model. Under the Pioneer ACO Model, beneficiaries will maintain the full benefits available under traditional Medicare (fee-for-service), as well as the right to receive services from any healthcare provider accepting Medicare patients.

To ensure beneficiaries receive high quality care and enjoy a positive experience, CMS has established robust quality measures that will be used to monitor the quality of care provided and beneficiary satisfaction. These measures mirror those in the Shared Savings Program. For more information, visit www.cms.gov/sharedsavingsprogram and view the fact sheet entitled “Improving Quality of Care for Medicare Patients: Accountable Care Organizations.”

More information about beneficiary protections and quality measures is available in the fact sheet entitled “The Pioneer ACO Model: A Better Care Experience Through a New Model of Care.”


Eligibility Criteria/Program Requirements
To be eligible to participate in the Pioneer ACO Model, organizations are required to be providers or suppliers of services structured as:
1) ACO professionals in group practice arrangements;
2) Networks of individual practices of ACO professionals;
3) Partnerships or joint venture arrangements between hospitals and ACO professionals;
4) Hospitals employing ACO professionals; or
5) Federally Qualified Health Centers (FQHC).

Health Information Technology
By the end of 2012, Pioneer ACOs must attest and CMS will confirm that at least 50% of the ACO’s primary care providers have met requirements for meaningful use of certified electronic health records (EHR) for receipt of payments through the Medicare and Medicaid EHR Incentive Programs.

Minimum Number of Aligned Beneficiaries
Beneficiaries are aligned to ACOs through the healthcare providers that choose to participate. CMS will review where a beneficiary has been receiving the plurality of his/her primary care services, and use that information to establish which beneficiaries are aligned to a participating provider. If a primary care provider chooses to participate in an ACO, the beneficiaries aligned to him or her through this process would be aligned to the ACO. If a beneficiary receives less than 10 percent of their care from a primary care provider, CMS will review where a beneficiary has been receiving the majority of his/her specialty services to determine alignment.

Participants generally must have a minimum of 15,000 aligned beneficiaries unless located in a rural area, in which case are to have a minimum of 5,000 beneficiaries. In order to be aligned, beneficiaries must be enrolled in original, fee for service Part A and B Medicare. They cannot be participating in Medicare Advantage plans.

Participation of Other Payers
The Innovation Center believes that Pioneer ACOs will be more effective in producing improvements in three part aim of better care for individuals, better health for populations, and slower growth in expenditures if they fully commit to a business model based on financial and performance accountability. The Innovation Center therefore requires Pioneer ACOs to enter similar contracts with other payers (such as insurers, employer health plans, and Medicaid) such that more than 50 percent of the ACO’s revenues will be derived from such arrangements by the end of the second Performance Period.

Selection Process
CMS conducted a lengthy, open and competitive application process to select the final participants in the Pioneer ACO Model. CMS released a Request for Applications (RFA) in May 2011 that detailed the selection criteria. Applicants were required to submit both a Letter of Intent and Application. Applications were reviewed by a panel of experts from the Department of Health and Human Services as well as from external organizations, with expertise in the areas of provider payment policy, care improvement and coordination, primary care, and care of vulnerable populations. These panels assessed the applications based on the criteria detailed in the RFA. Applicants with the highest scores were invited to participate in interviews with Innovation Center leadership at the CMS facility in Baltimore. Based on these interviews, CMS chose a pool of finalists. The Pioneer ACOs announced in December 2011 were those finalists choosing to sign a final agreement with CMS.

Pioneer ACO Model and the Shared Savings Program
The Pioneer ACO Model is distinct from the Shared Savings Program. The Shared Savings Program fulfills a statutory obligation set forth by the Affordable Care Act to establish a permanent program that develops a pathway forward for groups of health care providers to become ACO’s, while the Pioneer ACO Model is an initiative designed to test the effectiveness of a particular model of payment. Final rules for the Shared Savings Program were published in November 2011. More information is available at www.cms.gov/sharedsavingsprogram.

The Pioneer ACO Model differs from the Medicare Shared Savings Program in the following ways, among others:
• The first two years of the Pioneer ACO Model are a shared savings payment arrangement with higher levels of savings and risk than in the 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 outcomes-based payment arrangements with other payers by the end of the second year, and fully commit their business and care models to offering seamless, high quality care.

Additional Information
Additional information about the Pioneer ACO Model is available on the Pioneer ACO Model website - http://www.innovations.cms.gov/initiatives/aco/pioneer