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Most ACOs in Next Generation, Pioneer models saved money, earned payments for 2016

This is despite seven Next Gen ACOs having lost money, three had dropped out in 2016 due to financial targets they said were set too high.

Susan Morse, Senior Editor

Credit: <a href="https://en.wikipedia.org/wiki/United_States_Department_of_Health_and_Human_Services#/media/File:DHHS2_by_Matthew_Bisanz.JPG">Matthew Bisanz</a>.Credit: Matthew Bisanz.

The Next Generation and Pioneer ACO models earned payments for 11 out of 18 health systems participating in Next Generation in 2016 and for six out of eight in Pioneer.

Seven Next Generation ACOs lost money, according to the Centers for Medicare and Medicaid Services. Three had dropped out in 2016 due to financial targets they said were set too high to earn savings.

[Also: ACOs score high on MIPS, but low on payment adjustment]

But three-quarters of Next Generation ACOs in 2016 reaped financial rewards from the risk program, from a low of $272,140 for Steward Integrated Care Network in Massachusetts, to a high of $12 million for Baroma Accountable Care in California.

The results are important because they show that for most, shared risk works, as CMS is currently asking health systems for feedback on existing payment models.

ACOs interviewed in September said they support changes out of CMS's innovation center that would allow for greater flexibility in future models. This was true whether the system made or lost money in current models.

Montefiore has seen success in both Pioneer and Next Gen. The health system's five-year experience has been positive, said Kirstin Mooney, assistant vice president of regulatory and legislative poiicy for Montefiore.

Despite instability in the Affordable Care Act and the move to make bundled payment models voluntary, rather than mandatory, providers interviewed have said they expect the push to value-based care will remain the same. ACOs move health systems in this direction.

But there were also big losers under Next Generation. The largest losses were reported by LifePrint ACO in Delaware, a subsidiary of UnitedHealth Group, which owed $6.1 million, OSF HealthCare in Illinois, which lost $5 million and MemorialCare Regional in California, which also lost $5 million.

[Also: ACOs increasing their participation in downside risk contracts, study says]

OSF began with Pioneer in 2011 earning high quality scores in 2014 before transitioning to Next Generation.

High earners included Iowa Health Accountable Care, at $10.5 million, Triad HealthCare Network in North Carolina at $10.7 million, Trinity Health in Michigan, at $6.5 million and Deaconess Care Integration in Indiana, which earned $5.7 million.

[Also: Medicare Shared Savings ACOs saved $1 billion over 3 years, report says]

In 2017, Next Generation gained an estimated 28 new ACOs, for an estimated 44 health systems taking part.

Next Generation builds on the Medicare Pioneer ACO model, which was in its final year of the program in 2016.

Eight health systems took part in Pioneer in 2016, with six reporting financial savings.

The Banner Health Network in Arizona realized the highest rewards at $10.9 million. Its benchmark of $504 million for 42,040 beneficiaries was met with an actual expenditure of  $489 million.

None of the Pioneer ACOs owed money, but the results were financially neutral for Monarch HealthCare in California and Partners HealthCare in Massachusetts. Though both successfully reported quality and their quality scores were 90.25 percent and 94.51 percent, respectively, which were higher than some of the other health systems that earned money.

The Michigan Pioneer ACO had a lower quality score of 88.93 percent and still earned $7.4 million. Michigan performed better than its benchmark expenditure of $232 million for its 14,319 beneficiaries. It's actual expenditures were $220 million.

Monarch's actual expenditures were $264 million compared to its $266 million benchmark, for a savings of $1.5 million, not enough to earn savings.

Partners actual expenditures were also lower than its benchmark - $1.054 billion compared to $1.059 billion, for a savings of $5 million, which was not enough for a payment.

But Allina Health in Minnesota also saved $5 million and earned $3 million in shared savings, from a $268 million benchmark versus $263 million actual.

Atrius Health in Massachusetts earned $6.8 million, Fairview Health Services in Minnesota, $1 million and Montefiore ACO in New York, $7.4 million.

Telehealth benefits allowed in the Next Generation ACOs helped to save them a collective $58 million last year, according to Politico's figures from the CMS Innovation Center.

When including 2016 results from the Pioneer ACO and dialysis models, participants saved Medicare $200 million, with three-quarters of them hitting savings targets, Politico said.

Results for Medicare Shared Savings ACOs, which account for the vast majority of ACOs, will be posted at the end of October, CMS said.

Individual Medicare ACO Aledade and Caravan Health, have already released their results.

In 2016, Aledade in Maryland, saved $9.3 million, with five of its seven ACOs coming in under benchmark and one at benchmark.

Caravan in Missouri achieved $26 million in savings for its 23 ACOs in 2016. ACO participation can increase MACRA performance scores by 20 percent, Caravan said.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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