Dartmouth-Hitchcock exits Pioneer ACO program: 10 things to know

Lebanon, N.H.-based Dartmouth-Hitchcock health system is pulling its accountable care organization out of Medicare's Pioneer Program, following suit of 13 other organizations that have dropped out since the initiative's start in 2012.

Here are 10 things to know about the system's decision to leave the program.

1. Dartmouth-Hitchcock gave CMS official notice of its departure from the program on Sept. 14, according to Robert A. Greene, MD, executive vice president and chief population health management officer at Dartmouth-Hitchcock.

2. The medical system ultimately decided to leave because the costs of running the program outweighed savings. "We are saving money, yet we have to pay more back to CMS. It just becomes financially unsustainable, because on top of the financial measurements, we've had to make investments in our system in terms of people and processes that run into seven figures," Dr. Greene says.

3. Dartmouth-Hitchcock was not able to achieve savings in 2013, the second year of the program, and wound up paying back $1.4 million to CMS. In its third performance year, Dartmouth-Hitchcock saved almost 4 percent over the previous year and beat its comparison group — other non-ACO patients in New Hampshire — by 1.2 percent, according to Dr. Greene. However, the ACO wound up 0.5 percent short of its benchmark to earn savings. That half percent equated to more than $3.7 million in payments to CMS for 2014.

4. Dr. Greene also says Dartmouth-Hitchcock struggled in the program because, "We are a relatively low-utilization health system and these programs are based on gainsharing." He says the system's CEO and President James N. Weinstein, DO, likens the situation to two different runners. It's simple for a runner who runs a 12-minute mile to drop 2 minutes off her time with a little training. But for the runner who is already running a 5-minute mile — getting to the 4 minute mark is much more difficult, Dr. Greene says.

5. Dartmouth-Hitchcock joined the Pioneer ACO program in 2012 and it still plans to continue in value-based arrangements. "We felt it was part of our vision to create a sustainable health system that improves the lives of the people and communities we serve," Dr. Greene says, noting the organization's patient services will not change.

6. The Pioneer program, CMS' most aggressive ACO model, was designed for organizations with experience providing coordinated, patient-centered care. "We've been very supportive of CMS ACO-related programs," Dr. Greene says. Before the Pioneer program, Dartmouth-Hitchcock was one of 10 organizations to participate in CMS' Physician Group Practice Demonstration, which was a precursor to the ACO model. It also has implemented medical homes and participates in commercial ACOs.

7. With Dartmouth-Hitchcock gone, just over half of the original 32 Pioneers remain. Other drop-outs have cited similar challenges. San Diego-based Sharp Healthcare, for instance, said it was at risk for "significant shared loss" in its third performance year when it decided to exit the program last fall.

8. Dr. Greene confirmed Dartmouth-Hitchcock applied for the Next Generation ACO model and CMS accepted its application. He said the system confirmed its interest in the new pilot at the same time it gave its final decision to drop out of the Pioneer program. The Next Generation model is slated to begin in January.

9. Dartmouth-Hitchcock finds the Next Generation model more attractive because participants are given prospective annual targets, whereas the Pioneer program rebenchmarked every quarter, according to Dr. Greene.

10. He also cited beneficiary enhancements as benefits of the new program. The Next Generation model allows for voluntary alignment, so patients have the choice to participate. It also covers more home care and allows organizations to bill for telehealth services from a facility to patient's home, not just between facilities, according to Dr. Greene.


More articles on accountable care:

5 things to know about CMS' new ACO dialysis model
Brookings Institute's Mark McClellan on ACOs: 'We're at the end of the beginning'
8 accountable care, shared savings agreements in September

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