Thought Leader’s Corner: How CMS’ Recently Announced ACO Pioneer Model Will Impact ACO Adoption, as appeared in Accountable Care News

As appeared in Accountable Care News, June 2011.

Q. "How do you think CMS' recently announced ACO Pioneer Model will impact ACO adoption?"

Most striking to me about the Pioneer ACO program is how fast the track is to participation - letters of intent due to CMS June 10, applications due July 18, program to begin in the Fall. The Pioneer ACO Model's principal new feature is a more advanced risk model leading to population-based payments. CMMI's stated goal for the population-based payment methodology is to allow Pioneer ACOs the revenue flexibility to provide services not currently reimbursed under the Medicare Fee-For-Service payment methodology and to invest in the infrastructure to support care coordination.

In addition, CMMI strongly encourages Pioneer ACO applicants to propose further alternative payment models, which CMMI will consider for possible inclusion in the program. Given the nearly-universal criticism of the Track 2 "two-sided risk" model set forth in the MSSP Proposed Rule, one wonders how much of that model, if any, will remain in the MSSP final rule, at least as a mandatory component, in light of the risk model work being done by CMMI. In addition to announcing the Pioneer ACO model, CMMI requested comments on an Advanced Payment Initiative, a proposal to test whether and how pre-paying a portion of future shared savings for investments in infrastructure and staff for care coordination would increase participation in the MSSP. Thus, with the Pioneer ACO Model and the Advanced Payment Initiative, CMMI has provided options, or at least is considering options, that might appeal to provider organizations both more advanced and less advanced than the target ACOs in the MSSP.

Among other changes from the MSSP, the Pioneer ACO Model provides (1) as mentioned, a more advanced financial risk model, including transition to a population-based payment in the third year; (2) a requirement that participants have at least 50% of their total revenues derived from outcomes-based contracts by the end of the second year, thus making it mandatory to some degree that Pioneer ACOs receive such payments in Medicaid and/or commercial market contracts as well as Medicare; (3) the option of prospective patient attribution; (4) counting certain non-MD providers and specialists for attribution purposes; (5) a minimum of 15,000 assigned Medicare beneficiaries (5,000 in rural areas). While the Pioneer Model otherwise operates in much the same fashion as the MSSP, the above key changes are significant and answer some of the principal criticisms of the MSSP Proposed Rule.

CMMI indicates that it is interested in 30 ACOs under the Pioneer ACO Model. Applicants will need to apply before knowing the substance of the MSSP final rule (although they are given the opportunity to withdraw their application once the final rule is out). An organization cannot, of course, be in both programs. It will be very interesting in the September/October 2011 time period through the end of 2011 to see how many organizations apply for the Pioneer ACO Model, how many are approved, and how many others seek to be admitted to the MSSP. There is a lot riding on how this plays out - both substantively in terms of advancing the cause of accountable care and as to the perception that Medicare is, or is not, making a helpful contribution.