Health system may withdraw from Pioneer ACO program

Despite posting high quality scores, execs disappointed to be sending millions back to the government.
By Susan Morse
10:41 AM
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Dartmouth-Hitchcock Medical Center

Following two years of considerable financial losses, one health system is considering dropping out of the CMS Pioneer ACO program altogether.  

Dartmouth-Hitchcock Medical Center is considering pulling out of Pioneer ACO model, according to Robert A. Greene, MD, executive vice president and chief population health management officer for the New Hampshire-based accountable care organization.

"We'd really liked to stay in, but when you see two years in a row, see consistent losses by the CMS program methods, we really have to step back and reconsider," Greene said. "We haven't made a final decision but we're really thinking hard about whether to continue."

Dartmouth-Hitchcock must tell the Centers for Medicare and Medicaid Services by Monday, Sept. 14, he said.

"I think we're already saving money, that's the frustrating part," he said.

[See also: CMS to expand Pioneer ACO program.]

If Dartmouth-Hitchcock does leave Pioneer for 2015, it may still join the Next Generation model being initiated by the Center for Medicare and Medicaid Services for 2016, according to Greene.

"They're definitely listening to us and other policy makers," Greene said of CMS' plans for Next Generation. "We have applied for Next Generation. We (would) have to sign a final contract by the end of the year."

Dartmouth-Hitchcock expects to find out "imminently" whether its application to the Next Generation model has been accepted, he said. If declined, the organization may exit the Pioneer ACO program for 2015.

"At a certain point," he said, "we have to say, what's the financial viability?"

The hospital owes $3.6 million for Year 3 for spending above its benchmark, according to results released by CMS Tuesday. 

Dartmouth-Hitchcock still owes $1.4 million from Year 2, Greene said.

[See also: Pioneer ACO: An endurance race many quit.]

After reconciling the figures with CMS, Greene expects the hospital will write a check to the government for an estimated $3.7 million.

The hospital has accrued the funds so that money will not come out of operating expenses, he said.

Dartmouth-Hitchcock is among three hospitals out of 20 in the Pioneer risk-sharing model that owe CMS money.

Beacon Health in Maine, while obtaining the second highest quality scores, owes $2.9 million and Franciscan Alliance in Indiana owes $2.5 million, according to CMS.

Dartmouth-Hitchcock has good quality scores amid a time it added hospitals and patients to its network, raising the patient population from 23,000 to 41,000 between 2013 to 2014, according to Greene.

"In terms of the quality, we're very happy with the results," he said. "We got 87.6 percent, just above the average for all the Pioneers; we met the quality threshold. I feel like we've done really well, we added a large percentage of patients and hospitals. Despite adding 22,000 patients, we improved our quality filing. When you look at the actual numbers we saved in one year to the next, over our own performance, we saved almost 4 percent."

[See also: 'Next Generation' ACO model puts focus on telehealth.]

However, it didn't meet CMS benchmarks, he said, despite investments made in data systems and infrastructure.

"It wasn't good enough," he said. "For our organization that's discouraging."

Dartmouth-Hitchcock has been very supportive of the Pioneer model, Greene said, and has been with Pioneer since the beginning.

"If it looks like a reasonable chance, we would love to support CMS," Greene said.

While Dartmouth-Hitchcock will end up paying CMS, it's a different story for Banner Health Network in Arizona, which will receive a check for over $18 million in shared savings cash.

CEO Lisa Stevens Anderson and Chief Medical Director Shaun Anand said the result was based on a lot of hard work between many partners in an integrated delivery system of 4,000 affiliated physicians.

"One of the biggest emphasis we have continued to invest in, is the technology," Anderson said. "It's the ability to connect the various parties that are involved."

Banner also concentrates on treating complex conditions in the home in a program called ICare.

"Beneficiaries are able to remain at home and connect via a tablet with a centralized care team, to a physician, pharmacist, nurse," she said. "In Year 2, overall we've had a 27 percent reduction in total cost of care for beneficiaries that have extremely complex conditions."

Partners HealthCare in Massachusetts, which is getting over $13 million from CMS, also has an integrated care management program called iCMP that focuses on medically complex patients in the home. Nurse care managers oversee complicated and chronically ill patients with multiple medical conditions, such as diabetes or heart disease. The iCMP program helps keep these high-risk individuals healthier and lowers the overall cost for them by preventing avoidable hospital visits, according to Partners.

Other PHM initiatives include virtual visits and remote monitoring.

The Pioneer ACO model is a risk-sharing program that includes more experienced health systems. Fifteen out of the 20 participants generated a total of $120 million in savings, a 24 percent jump compared to performance in 2013. CMS said 11 of those generated enough savings to earn a total of $82 million in shared savings payments.

Of five Pioneer ACOs which generated losses, three owe money back to CMS and will pay a combined $9 million in shared losses.

Mean quality score among Pioneer ACOs increased to 87.2 percent in performance Year 3 from 85.2 percent in performance Year 2, which was itself an improvement from 71.8 percent in performance Year 1.

The organizations showed improvements in 28 of 33 quality measures and experienced average improvements of 3.6 percent across all quality measures compared to performance Year 2.

Particularly strong improvement was seen in medication reconciliation, screening for clinical depression and follow-up plan and qualification for an electronic health record incentive payment, according to CMS.

This story first appeared in Healthcare IT News' sister publication Healthcare Finance here