In May of 2011, the Centers for Medicare and Medicaid Services (CMS) unveiled a program to spur growth of accountable care organizations (ACOs) prior to the full implementation of the Medicare Shared Savings program. The Pioneer ACO model is a good fit for hospitals or large medical practices with a demonstrated history of care coordination and quality improvement. These organizations are pioneers in the sense that they have already embarked on organized care practices and have some of the needed infrastructure in place and are therefore leading the way for others. As such, it is expected that Pioneer ACOs will be able to demonstrate methods for achieving both cost savings and care improvement in the Medicare fee-for-service (FFS) population.

Participants in this program will have the potential to be financially rewarded for per-patient savings, but they are also at risk for a loss should patients cost more than expected in aggregate.

This white paper discusses the elements of risk associated with Pioneer ACOs as well as potential strategies for controlling costs and identifying opportunities for savings.