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1st-year Results are in for Pioneer Accountable Care Organizations (ACOs)


By Alec McLure, MPH, RHIA, CCS-P
Director, Product Management


The Accountable Care Organization (ACO) concept is built around groups of doctors, hospitals, and other providers working as a team to manage a patient's care, both inpatient and outpatient. The theory is that with improved care coordination there will be better health outcomes and reduced healthcare costs. 

This reduction in costs to Medicare (cost savings) is shared with the ACO - if there is a reduction in costs and improvement in patients measurable health outcomes, part of this “extra revenue” is sent back to the ACO. 

On the other hand, there is also risk – an ACO that is not effective in reducing costs will lose financially, either by losing out on a bonus, reduction in baseline reimbursement, or other potential models – these vary.

Medicare has offered various “flavors” of ACOs – the Medicare Shared Savings Program, the Advance Payment ACO Model, and the Pioneer ACO Model, the idea being to compare the effectiveness of different approaches.

The Pioneer Model was established in 2011 with 32 participants, all of which already had experience offering coordinated, patient-centered care.  The main distinction of the Pioneer Model is higher levels of both potential reward and potential risk than present in the Shared Savings Program.

After two years in the program (evaluation started on January 1st , 2012) those who had shown savings will be able to move to a per-beneficiary per month type of payment and move away from the existing fee-for service payment.

In July, the Centers for Medicare and Medicare Services (CMS) published results of the first year of the Pioneer Program:


  • For the 669,000 Medicare enrollees covered by the program, 2012 costs increased by only 0.3 percent vs. 0.8 percent for similar beneficiaries who are not in Pioneer ACOs
  • 13 out of 32 (41%) Pioneer ACOs produced shared savings with CMS – generating a gross savings of $87.6 million and saving $33 million for Medicare.
  • Only 2 Pioneer ACOs had shared losses, totaling approximately $4 million.
  • A significant part of the program savings were driven by reductions in hospital admissions and readmissions.


  • All 32 Pioneer ACOs successfully reported the quality measures they had to report.
  • 25 of 32 (78%) had lower risk-adjusted readmission rates than a Medicare benchmark
  • Measures of blood pressure control for diabetics patients showed 68% of patients under adequate control as opposed to a comparison group with 55% (almost 24% better)
  • They also performed well on cholesterol control for diabetic patients, with LDL (Low Density Lipoprotein) control at 57% as compared to 48% for a reference population (almost 19% better).

Changes in Participation

  • Seven Pioneer ACOs that did not produce savings are switching over to the Shared Savings Program type of ACO and two of them have decided to leave the program entirely.
  • This leaves 23 of the original 32 participants (72%) continuing into their second year as a Pioneer ACO.


To begin with, it is worth bringing up that having all of the Pioneers report on all of the 33 measures shows that it is possible to report them - it would be interesting to know more about the cost and challenges involved with successfully reporting them.

In spite of some positive results, it is a concern that less than half of the Pioneer ACOs were able to generate shared savings although they had been chosen specifically for their experience in coordinated care - additionally losing over a quarter of the original participants in one year doesn't bode well for the future at least of this particular type of ACO. 

We are looking forward to comparing these results with those of the Shared Savings Program’s first year (which started in April of 2012) and should be available in the not-too-distant future.



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