By Sharon Bee Cheng, Strategic Healthcare
The Center for Medicare and Medicaid Innovation (CMMI) recently unveiled the Pioneer Accountable Care Organization Model.  This program is intended to complement—not replace—the ACOs developed under the Shared Savings Program (SSP) authorized in Patient Protection and Affordable Care Act.  About thirty organizations will be chosen as Pioneer ACOs; letters of intent are due June 10, 2011, and applications are due July 18, 2011. The first performance period could begin as early as the fourth quarter of 2011.
The Pioneer ACO program is very similar to the Shared Saving Program in terms of encouraging integration of care, quality improvement, and cost savings.  However, the Pioneer model offers additional flexibility and upside opportunity to organizations with some experience in shared savings, performance-based contracting, or value-based purchasing.  The chart below features some of these differences.


Pioneer Versus Shared Savings Program ACOs



Shared Savings Program

Number of beneficiaries At least 15,000, unless rural 5,000 to 20,000
Experience with shared savings,
performance-based contracts
Preferred Not necessary
Beneficiary assignment Prospective possible Retrospective only
Payments to providers Partial capitation available Fee for service
Getting to bonuses After 1 percent saved After at least 2 percent saved
Quality targets Same Same

Beneficiary Alignment
Pioneer ACOs can opt for prospective or retrospective alignment. Under prospective alignment, CMS will identify the ACO’s beneficiary population through three years of fee-for-service, primary care claims before the performance period, align those beneficiaries with the ACO, and measure the ACO’s success or failure with that pre-identified set of beneficiaries.  Pioneer ACOs could opt for retrospective assignment using claims data from an ACO’s experience during the performance period to determine which beneficiaries are attributed to the organization.
Unlike there Medicare Shared Savings Program, the Pioneer ACOs are generally required to be larger – participants must demonstrate that 15,000 beneficiaries can be aligned to the ACO.  CMMI preserves the ability of rural ACOs to participate in the Pioneer program by aligning a minimum of 5,000 beneficiaries.  In the Pioneer program, both nurse practitioners and physician assistants are considered primary care providers for the purpose of attributing beneficiaries.  This change from the SSP proposal could increase the number of beneficiaries aligned with a group of providers, making it easier for rural communities—which typically use more mid-level providers—to reach the 5,000-patient threshold for participation.
Beneficiaries who are managed by a primary care physician will be aligned with an ACO through that primary care physician.  Beneficiaries who receive the plurality of evaluation and management from specialists in nephrology, rheumatology, endocrinology, pulmonology, neurology, and cardiology can also be aligned with an ACO.
CMS will offer variations in the shared savings and shared loss percentages, where Pioneer models can opt for up to 70 percent shared savings and losses.  Pioneer ACO agreements will include three performance periods with escalating shared savings and losses percentages in each period; after the first three performance periods, CMS may extend or terminate agreements with ACOs pending the organization’s demonstrated ability to generate savings and/or meet quality measures.
Pioneer ACOs that achieve savings benchmarks in years one and two are eligible to receive a 50/50 blend of fee-for service payments and monthly population-based payment (partial capitation).
Quality Performance Measures
Proposed Pioneer ACO quality performance measures are the same as the proposed Shared Savings Program measures outlined in the proposed ACO rules. They will be adjusted according to the final rules for the Shared Savings Program.
Eligible Applicants to the Pioneer ACO Program

  • ACO professionals  in group practice arrangements
  • Networks of individual practices of ACO professionals
  • Hospitals employing ACO professionals
  • Partnerships or joint ventures arrangements between hospitals and ACO professionals, or
  • Federally Qualified Health Centers (FQHCs – CMS highly encourages ACOs with FQHCs as the lead applicant to apply)

CMS will require Pioneer ACOs to enter outcome-based contracts with non-Medicare purchasers (such as private health plans, state Medicaid agencies, and/or self-insured employers), and demonstrate that they generate a majority of their revenue from outcome-based contracts by the end of the second performance period. Outcome based contracts include terms with shared savings and/or financial risk, patient experience measures, and substantial quality performance incentives.
By the end of 2012, Pioneer ACOs must attest and CMS will confirm that at least 50 percent of the ACO’s primary care providers have met meaningful use requirements, and preference will be given to ACOs with advanced electronic health record systems in place.