Pioneer, Shared Savings: Payment Nuts and Bolts
In January, CMS launched the Pioneer ACO Model and selected 32 organizations to test out ways to offer coordinated care that improves quality and lowers costs. The Pioneers aren’t typical health systems, but rather organizations that already have significant experience in care coordination and may already have been operating as an ACO. Both the Beth Israel Deaconess Physician Organization and Atrius Health are among the Pioneers.
Under the 3-year program, the ACOs will have 2 years to continue receiving their regular fee-for-service payments, and they will have the chance to share in either the savings or losses to the Medicare program based on the cost of the care provided. Eligibility for those bonuses also would depend on meeting quality targets. In the third year, those organizations that have saved money for the Medicare program early on will be able to switch a substantial portion of their reimbursement to a capitated payment model in which they will receive a flat, per-beneficiary, per-month payment to manage an individual’s care.
CMS officials also have selected the first 27 organizations to participate in the Shared Savings Program, an initiative designed to test the ACO concept among organizations with less experience in coordinating care across inpatient and outpatient settings.
ACOs in the Shared Savings Program will receive their fee-for-service payments and be eligible to share in any savings they generate for Medicare. Organizations can choose to share in the savings, or take on more financial risk and potentially earn higher bonus payments.