A Look at How ACOs are Performing

August 16, 2013

Recently released performance results shed new light on the effectiveness of accountable care organizations.

Hundreds of accountable care organizations (ACOs) have cropped up across the country since the implementation of the Affordable Care Act in 2010. But because most ACOs are still in the early stages of development - the first Medicare Shared Savings Program (MSSP) participants began participating in April 2012 - it's been difficult to determine whether ACOs are meeting their goals: improving care quality while reducing care costs.

In July, however, the industry received some insight into ACO performance when CMS announced the first-year performance results of its 32 Pioneer Accountable Care Organizations. The Pioneer ACOs, which began participating in the program in January 2012, operate under the same premise as the MSSP participants, but they experience higher levels of risk and reward.

So how did the participants do? Here are some of the most noteworthy results provided by CMS:

• Thirteen of the 32 ACOs produced shared savings with CMS, generating a gross savings of $87.6 million in 2012, and saving Medicare nearly $33 million.

• The Pioneer ACOs also performed better than published rates in fee-for-service Medicare for all 15 clinical quality measures for which comparable data are available, according to CMS. For instance: 25 of 32 ACOs generated lower risk-adjusted readmission rates for their aligned beneficiaries than the benchmark rate for all Medicare fee-for-service beneficiaries.

• Seven Pioneer ACOs, however, did not produce savings and they notified CMS that they will leave the pioneer program and apply to the MSSP.

• Two Pioneer ACOs indicated to CMS their intent to leave the ACO program altogether.

While the first-year results are important to consider when gauging accountable care effectiveness, it's also premature to base broad judgments on them, Andrew Croshaw told Physicians Practice. Croshaw is a partner and managing director of the Center for Accountable Care Intelligence, which researches and analyzes the evolution and future of integrated care at Leavitt Partners, a Salt Lake City-based consulting firm.
"We have to acknowledge that it's very early on in the experimentation phase," he said. "In any new industry, there is a massive amount of experimentation that ultimately gives way to successful models, and that's where we find ourselves in this movement and the ACOs that participated in the Pioneer program."
Croshaw said it could be 18 months to 36 months before we can fairly gauge ACO performance.

"I think it's the kind of thing where little by little we will see examples of success," he said. "The Pioneers have already demonstrated examples of success in terms of improving the quality of care. What I think the market is hungry to see are examples of financial success where you can not only lower the cost of caring for a population, but have the providers be financially successful in doing so."