Premier Healthcare Alliance has written a white paper outlining key financial and risk differences between three accountable care organization models: the Pioneer ACO and Tracks 1 and 2 of Medicare Shared Savings Program.
The paper compares the financial differences between each model rather than the structural or organizational differences. It includes the following key findings on MSSRP and Pioneer ACOs:
• If Medicare payments are restricted, a population-based approach — which is part of the third year of the Pioneer ACO program — will provide some protection for ACOs.
• Regional Medicare instability makes it difficult to predict alternative trends to MSSP or Pioneer.
• Prospective patient attribution under Pioneer ACOs creates a "regression to the mean dynamic." If the ACO's providers attract high-cost patients, attribution may occur during patients' high-cost periods. After the program begins, regression to the mean (including patient recovery) will result in lower costs in future years for high-cost patients.
• In the model used, Medicare expenditures increase by 10 percent and operating margins for an ACO with fee-for-service payments could double. However, if Medicare expenditures decrease by 10 percent, the operating margin could become zero. Pioneer ACOs would yield results in the opposite direction — lower Medicare expenditures would produce higher operating margins if the ACO can reduce its costs. MSSP Track 1 would produce a relatively constant operating margin, while MSSP Track 2 would fall between MSSP Track 1 and Pioneer.
Read the white paper, The Two Medicare ACO Programs: Medicare Shared Savings and Pioneer — Risk/Actuarial Differences.
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The paper compares the financial differences between each model rather than the structural or organizational differences. It includes the following key findings on MSSRP and Pioneer ACOs:
• If Medicare payments are restricted, a population-based approach — which is part of the third year of the Pioneer ACO program — will provide some protection for ACOs.
• Regional Medicare instability makes it difficult to predict alternative trends to MSSP or Pioneer.
• Prospective patient attribution under Pioneer ACOs creates a "regression to the mean dynamic." If the ACO's providers attract high-cost patients, attribution may occur during patients' high-cost periods. After the program begins, regression to the mean (including patient recovery) will result in lower costs in future years for high-cost patients.
• In the model used, Medicare expenditures increase by 10 percent and operating margins for an ACO with fee-for-service payments could double. However, if Medicare expenditures decrease by 10 percent, the operating margin could become zero. Pioneer ACOs would yield results in the opposite direction — lower Medicare expenditures would produce higher operating margins if the ACO can reduce its costs. MSSP Track 1 would produce a relatively constant operating margin, while MSSP Track 2 would fall between MSSP Track 1 and Pioneer.
Read the white paper, The Two Medicare ACO Programs: Medicare Shared Savings and Pioneer — Risk/Actuarial Differences.
Related Articles on Medicare ACOs:
Study Finds Very Few Providers, Private Payors Have Experience With Shared-Risk PaymentsLeaked Draft of Pioneer ACO Rules Reveals Capping Option, Alignment Details
Time Crunch: Why the Pioneer ACO Might Hurt A Hospital