San Diego’s Sharp Healthcare, a five-hospital system, is leaving the CMS Pioneer ACO Model, joining the growing ranks of other organizations that have left.
Out of the 32 original Pioneer ACOs, 22 remain, with nine leaving the program last summer. Several have opted instead for the less risky Shared Savings Program, widely considered easier on the finances.
Sharp made the plans to drop the Pioneer model known in its third-quarter financial statement and notified CMS and its center for innovation in late June, according to a report in Modern Healthcare.
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Sharp’s ACO had 28,000 Medicare beneficiaries, all of whom are being transitioned to other care-management programs, the company said. Sharp viewed the risk associated with the Pioneer Model as too much, despite starting out with high hopes from CMS, which oversees ACOs established under health reform.
“For 2012 and 2013, Sharp ACO’s performance was under a defined 2 percent and 1.9 percent minimum threshold, respectively, so no shared savings payments were earned and no increased cost payments were due,” the company said in its earnings statement. “In evaluating participation for the year ended December 31, 2014… Sharp ACO determined it was at risk for a significant shared loss, despite meaningful reductions in readmission rates and hospital and skilled nursing utilization.
“Because the Pioneer financial model is based on national financial trend factors that are not adjusted for specific conditions that an ACO is facing in a particular region (e.g., San Diego), the model was financially detrimental to Sharp ACO despite favorable underlying utilization and quality performance.”
