On May 17, 2011, CMS's Center for Medicare and Medicaid Innovation announced a series of initiatives designed to increase provider participation in accountable care organizations (ACOs). First, CMS unveiled its plans for a Pioneer ACO Model, providing an opportunity to more experienced ACOs for higher levels of shared savings (and risk of losses). Second, CMS has begun accepting comments on a possible Advance Payment Initiative that would pay ACOs a certain percentage of their expected shared savings at the beginning of their participation period to defray startup costs. Third, beginning June 20 in Minneapolis, CMS will hold a series of Accelerated Development Learning Sessions for ACO leadership teams to exchange best practices.
Pioneer ACO Model. The Pioneer ACO Model is available to ACOs willing to accept greater risk of shared losses in exchange for a larger portion of shared savings during the first two years of their participation agreement, with the potential to receive a "population-based payment model" in their third year of participation. Pioneer ACOs will have the option to have their aligned beneficiaries assigned prospectively or retrospectively.
Under the "core" payment options, a Pioneer ACO is eligible for up to 60 percent of shared savings or losses, with a shared savings/loss limit of 10 percent of their projected expenditure benchmark. In the second year, a Pioneer ACO is eligible for up to 70 percent of shared savings or losses, with a savings/loss limit of 15 percent. CMS will also offer Pioneer ACOs the option to receive slightly more or less shared savings/losses during the first two participation years. If after the first two participation years the Pioneer ACO realizes a minimum amount of shared savings (to vary by the historical Medicare expenditure levels in the State where the plurality of the ACO's beneficiaries reside), the ACO will be eligible for a population-based payment for future participation years. Under the population-based payment model, Pioneer ACOs will receive 50 percent of their expected fee-for-service payments for aligned beneficiaries, as well as a per-beneficiary per-month payment equal to the remainder of the ACO's expected fee-for-service revenue for those aligned beneficiaries. CMS states in its Request for Application that this payment model will provide ACOs with added flexibility to invest in care coordination infrastructure. In addition to the population-based payment, Pioneer ACOs will still be eligible for 70 percent of shared savings or losses realized during the participation year.
Applicants are also encouraged to recommend alternative payment models. If CMS determines that any of the proposals would result in shared savings equivalent to its existing models, CMS will make the proposals available to all participating Pioneer ACOs in lieu of the population-based payment model. Applicants also must agree to enter into outcomes-based contracts with private payers by December 2013.
Pioneer ACOs will be subject to the final quality performance requirements of the Shared Savings Program. CMS will permit approved Pioneer ACOs to withdraw from the program by January 2012 if the Pioneer ACO finds the final Shared Savings Program requirements unacceptable.
Organizations interested in participating in the program must submit a letter of intent to CMS by June 10, 2011, which is available here. Applications are due by June 18, 2011, and are available here. The Request for Application is available here.
Advanced Payment Initiative and Accelerated Development Learning Sessions. CMS also is accepting comments on a possible Advance Payment Initiative to provide ACOs with up-front payments based on a portion of their expected shared savings. ACOs would need to submit a plan to CMS showing how the advanced payments would improve care coordination infrastructure. Comments may be submitted via email to advpayACO@cms.hhs.gov by June 17, 2011. CMS's request for comments is available here.
Lastly, CMS will hold its first of four Accelerated Development Learning Sessions from June 20-22, in Minneapolis. ACO leadership teams will have the opportunity to meet with ADLS "faculty"—representatives from other provider organizations experienced in care coordination—to learn best practices as they plan for the Shared Savings Program. Attendance is free, and registration details are available here.