The Department of Health and Human Services announced the expansion of the Pioneer ACO model into other Medicare programs, following certification by CMS’ Office of the Actuary that the program saved Medicare $384 million in its first two years. “This is a crucial milestone in our efforts to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people,” said HHS Secretary Sylvia M. Burwell.

HHS said that Pioneer ACOs service more than 600,000 beneficiaries. According to the Pioneer ACO model evaluation report, compared to their counterparts in regular fee-for-service or Medicare Advantage plans, Medicare beneficiaries who are in Pioneer ACOs, on average report more timely care and better communication with their providers, use inpatient hospital services less and have fewer tests and procedures, and have more follow-up visits from their providers after hospital discharge.

Our Take: If you are familiar with the numbers previously published on Pioneer performance, you did a double-take when you saw the reported $384 million. According to CMS, Pioneer ACOs saved $279.7 million in 2102 and $104.5 million in 2013.

In October 2012, CMS published its initial findings on both outcomes and financial report. A summary of that report is given below.

Source: Centers for Medicare and Medicaid Services, 10/2014 Report

Not counting the losses incurred, in 2012 there was $147.35 million in gross savings, and in 2013 there was $129.55 million in gross savings—not counting losses incurred by the ACOs (a gain for CMS) nor savings shared with the ACOs (a loss for CMS). 

To clear up any confusion, the $384 million in savings reported last week is based on modeling and forecasting techniques used by its evaluation vendor, L&M policy research. Their analytical approach is too complex for a discussion here, but in simple terms uses statistical modeling to estimate what spending would have been in the absence of the ACO versus what actually happened.

As for the original financial performance data published by CMS last year? The report is nowhere to be found. The link above sourcing the table is to a Modern Healthcare archive.

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