Essential Primer: Pioneer ACOs and Proposed Advance Payment Initiative

Since its announcement on Tuesday, CMS has released few documents outlining how its new Pioneer accountable care organizations would work or exactly how proposed advanced payments for ACOs would be formulated and distributed. Here is what is known so far.

Pioneer Model for ACOs


1. Limited to advanced organizations. The Pioneer program will "provide a faster path for mature ACOs that have already begun coordinating care for patients," CMS stated.


2. Moves beyond shared savings. The Pioneer ACO Model "will allow these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Savings Program." The Center for Medicare and Medicaid Innovation will approve candidates and is now accepting applications for the Pioneer ACO Model.


3. Operates with private payor programs. The model is "designed to work in coordination with private payers in order to achieve cost savings and improve quality across the ACO, thus improving health outcomes and reducing costs for employers and patients with private insurance."


4. Application process starts in June. Pioneer ACOs move more rapidly than basic ACOs. Organizations interested in applying must submit a letter of intent by June 18, 2011 and applications are due by July 18, 2011. The Innovation Center will hold an Open Door Forum to review the Pioneer ACO Model Request for Application on June 7, 2011. Access the letter of intent by clicking here.


5. Implementation in two stages. The program would start as early as this summer. During their first two years, Pioneer ACOs will have "generally higher levels of shared savings and risk" than basic ACOs. In year three, "participating ACOs that have shown a specified level of savings over the first two years will be eligible to move a substantial portion of their payments to a population-based model." Payments to these ACOs would be flexible "to accommodate the specific organizational and market conditions in which Pioneer ACOs work."


6. Must meet key expectations. Pioneer ACOs will be expected to improve the health and experience of care for individuals, improve the health of populations and reduce the rate of growth in healthcare spending. Participating ACOs will be held financially accountable for the care provided to their aligned beneficiaries. CMS estimates that care models developed through the Pioneer model could save Medicare up to $430 million over three years.


7. Metrics will be publicly reported. CMS will publicly report the performance of Pioneer ACOs on quality metrics, including patient experience ratings, on its website.


8. Would not require rule-making process. In a news conference, Donald Berwick, MD, said he was "confident" that the new initiatives would not have to go through the rule-making process.

Advance Payment Initiative


1. Would cover start-up costs. The program "would provide additional up-front funding to providers to support the formation of new ACOs," CMS said. The program would pay eligible organizations "a portion of future shared savings." The advanced payment would be "in the form of a monthly payment for each aligned Medicare beneficiary," CMS stated.


2. Responding to providers' concerns. The program would "encourage participation" in the basic ACO program. "Early comments on the proposed Medicare Shared Savings Program rules suggest that some providers lack ready access to the capital needed to invest in infrastructure and staff for care coordination," CMS stated.


3. Still only a proposal. CMS' Innovation Center is proposing this model for ACOs entering the Medicare Shared Savings Program. Comments on this "potential proposal" should be electronically submitted to: by June 17, 2011.


4. Specifics not formulated yet. Basically, "ACOs would need to provide a plan for using these funds to build care coordination capabilities, and meet other organizational criteria," CMS stated. "Advance payments would be recouped through the ACOs’ earned shared savings."


Read the fact sheet on Options to Better Coordinate Healthcare.

Related Articles on New ACO Models:

Interest Will Shift From Medicare ACOs to Private Payors, Consultant Says

Berwick: New ACO Initiatives Not Due to Concerns Over Proposed Rules

CMS Unveils New ACO Model For Advanced Organizations, to Start in Summer



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