- Three more Pioneer accountable care organizations have announced that they are leaving the Medicare-run program, which is now in its third year. The three departing organizations are: Franciscan Alliance, Genesys PHO and Renaissance Health Network.
- According to Jennifer Westfall, the regional vice president for Franciscan Alliance Accountable Care Organization, the ACO did not receive any shared savings payments in the program's second year and does not anticipate any in the program's third year—despite strong performance.
- Both Franciscan Alliance and Genesys PHO plan to shift to the Medicare Shared Savings Program.
"Results from 2013, our second performance year (PY2) in the Pioneer ACO, are now available from CMS," Westfall told Modern Healthcare. "Overall, our Pioneer ACO received a quality score rating of 83.7%. While this is indicative of strong performance, we did not do as well in meeting our benchmark for reducing the costs of patient care."
Genesys PHO president and CEO Michael James blamed the Pioneer program's financial model for its decision to exit the program. The Genesys PHO organization received a $2.5 million penalty in the first year and a $1.9 million in its second year of participation.
These most-recent defections bring the number of remaining Pioneer ACOs down to 19. The announcement comes in the wake of San Diego-based Sharp HealthCare's departure in late August. Sharp, which operates five hospitals, announced in its Q3 earnings report that it has dropped out of the program due to fundamental flaws in the program's financial model. "Because the Pioneer financial model is based on national financial trend factors that are not adjusted for specific conditions that an ACO is facing in a particular region (e.g., San Diego), the model was financially detrimental to Sharp ACO despite favorable underlying utilization and quality performance," Sharp said in its disclosure.
That the payment model for the Pioneer program is too "one-size-fits-all" is not a new criticism. CMS uses national measures to set payment rates that do not take into account regional factors like area wage index. According to Alison Fleury, CEO of Sharp's ACO, San Diego's area wage index rose 8.2% from 2012 to 2014, but payments from the program did not account for that hike.