Texas Health Resources withdraws from Medicare’s Pioneer ACO program

Posted Tuesday, Jul. 16, 2013  comments  Print Reprints

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Texas Health Resources and a big physicians group intend to pull out of a Medicare program designed to save the federal healthcare program money and share it with doctors and hospitals, the Arlington-based hospital system said Tuesday.

The hospital and North Texas Specialty Physicians are partners in Plus ACO, an accountable care organization that joined the Medicare Pioneer ACO program in December 2011. Accountable care organizations are intended to accept financial responsibility for Medicare beneficiaries’ healthcare and share in any losses or savings their patients accrue.

In a statement, Texas Health said Plus ACO “is on pace to save $10 million annually, yet we are anticipating that we could be liable for a penalty between $6 million and $9 million at the end of 2013.” By pulling out, the company would avoid that.

Texas Health spokesman Wendell Watson said that puzzling outcome is the result of a combination of quality and cost benchmarks used by Medicare to determine an ACO’s performance.

The Centers for Medicare and Medicaid Services, or CMS, said Tuesday that of 32 Pioneer ACOs, two are withdrawing. It did not name them. Seven are moving into Medicare’s Shared Savings Program, which entails lower levels of risk and savings, CMS said.

CMS said all 32 Pioneer ACOs met goals the first year and outperformed traditional Medicare. It said 13 of the 32 ACOs shared in savings of $87.6 million.

Watson said Plus ACO did well in its first year with about 19,000 Medicare beneficiaries, but “we did not make progress as fast” the second year, when it expanded to 41,000 beneficiaries. Facing the likelihood of paying a penalty or dropping out of the program, “we had to make a decision,” he said.

Jim Fuquay, 817-390-7552 Twitter: @jimfuquay

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