Observations From Our Review of CMS's Administration of the First Performance Year of the Pioneer Accountable Care Organization Payment Model

We reviewed the Centers for Medicare & Medicaid Services' (CMS) administration of the Pioneer Accountable Care Organization (ACO) Payment Model (Pioneer Model).

In general, a Medicare ACO is composed of a group of health care providers and suppliers who accept joint responsibility for the cost and quality of Medicare Parts A and B for a specified group of fee-for-service beneficiaries. CMS assigns beneficiaries to each Medicare ACO on an annual basis according to each program's specifications. Through the Pioneer Model, CMS sought to support experienced ACOs in the transformation of their business and care delivery models so that they would not be reliant on fee-for-service volume and could focus on optimizing outcomes of care.

Calendar year 2012 was the first performance year (PY1) and was the only completed year at the time of our data collection. Because our review was limited to the first year of one ACO model, we are making no formal recommendations, and our observations do not represent an overall assessment of CMS administration.

Our observations on CMS's administration of Pioneer Model PY1 include that CMS (1) although not required to do so, did not publicly disclose certain retroactive payment arrangement selections for PY1; (2) did not have access to data needed to verify shared savings and loss calculations; (3) did not promptly process and collect the only shared loss; (4) performed two Pioneer ACO pilot audits and, although not required to do so, may not have communicated and resolved the results; and (5) did not always maintain complete Pioneer ACO agreements and other key documentation.