The University of Michigan Medical School's Faculty Group Practice this week joined six of the 32 other Pioneer accountable care organizations nationally in announcing plans to drop out of the Pioneer ACO program – one of Obamacare's most ambitious cost containment and quality improvement test projects.
But David Spahlinger, M.D., the faculty plan's executive director, said the UM Pioneer ACO is not giving up on the concept of coordinating care for Medicare patients.
For efficiency, physician partnership and integration reasons, Spahlinger said the UM Pioneer ACO plans to join a larger ACO in Medicare's shared savings ACO program for which it already participates.
Under health care reform, ACOs are groups of physicians, hospitals and other providers who band together to contract with Medicare.
If approved by Medicare, the UM Pioneer ACO would join The Physician Organization of Michigan ACO, an organization formed last year by UM and eight other physician organizations in Michigan. The POM ACO board also is expected to vote on adding UM later this month.
The POM ACO includes 1,800 physicians and cares for more than 81,000 Medicare beneficiaries across Michigan. UM's Pioneer ACO, which cares for 23,000 Medicare patients, includes 2,000 faculty physicians and IHA, an Ann Arbor-based multispecialty practice with ties to Ann Arbor-based St. Joseph Mercy Health System.
UM Pioneer ACO reported it achieved cost savings of 0.3 percent for Medicare during 2012. To share savings with Medicare, however, the UM Pioneer ACO needed to achieve a minimum 2 percent savings, Spahlinger said.
"We didn't receive any additional revenue in 2012," said Spahlinger, noting that the UM faculty group has been participating in a Medicare shared savings project since 2005 when it was part of the Medicare Physician Group Practice demonstration project, a forerunner of ACOs.
"We have had savings of 3.4 percent, 2.9 percent …" in the past, he said. "You get to a point of diminishing returns" trying to remove costs out of Medicare patient care.
Spahlinger said UM could have continued in the Pioneer program and generated additional savings by increasing use of care coordinators to reduce chronic care costs and working more closely with home health agencies.
"We went through the pros and cons of that," he said. "We just decided to combine the two programs. It is simpler, and as an academic center we get referrals from all over the state. The partnerships we develop with other groups across the state help us develop relationships for coordination of care."
Spahlinger said one-third of the Medicare patients in the UM Pioneer ACO receive care outside of the university system.
Detroit Medical Center, which operates Michigan Pioneer ACO, reported first year savings of 4.5 percent, said Mohamed Siddique, M.D., chairman of the Michigan Pioneer board.
"When we all embarked on the ACO journey, many of us were unsure and anxious," Siddique said in a statement.
"But we were willing to take on the challenge of changing the course of health care in Southeast Michigan. We knew we would take care of one of the sickest patient populations."
In a statement, Medicare said costs for 669,000 beneficiaries enrolled in the 32 Pioneer ACOs rose only 0.3 percent in 2012 compared with a 0.8 percent rate for other Medicare patients.
Some 13 out of 32 pioneer ACOs produced shared savings with CMS, saving nearly $33 million for Medicare. The Pioneer ACOs earned more than $76 million. Only two Pioneer ACOs lost money, totaling approximately $4 million.
Seven of the Pioneer ACOs that did not produce savings, including the UM Pioneer ACO, have asked Medicare to drop out of the Pioneer program and apply to the Medicare Shared Savings Program, another ACO model.
However, all 32 Pioneer ACOs, including UM's, improved in all 15 quality measures and earned incentive payments.
Under Medicare's shared savings program, the quality and cost of care are measured differently while the goal of reducing costs and improving health of patient remains.
Unlike Pioneer ACOs, which assume financial risk for patients under their care, shared savings ACOs do not assume financial risk.
"We still have to save 2 percent (under shared savings)," Spahlinger said. "We feel we can reduce administrative costs and eliminate staff duplication by being a part of one ACO."
POM ACO includes the University of Michigan Health System, Oakland Southfield Physicians, Olympia Medical Services, United Physicians, Advantage Health/St. Mary's Care Network, Crawford Mercy Physician Hospital Organization, Lakeshore Health Network, Physi cians' Organization of Western Michigan and Wexford Physician Hospital Organization.
Source : http://www.crainsdetroit.com/article/20130716/NEWS/130719840/-um-to-drop-from-pioneer-aco-program-will-continue-to-seek-medicare
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