Banner Health Considers Pioneer ACO Contract

Arizona may be the home of the first pioneer ACO, if the state’s Banner Health accepts a contract presented by CMS this week. The largest health system in the state, Banner has a lot to gain from the early adopter ‘pioneer’ program.

In a statement describing massive funding cuts, Banner CEO Peter Fine explained the thought behind the move to ACO.

The traditional model of fee-for-service is gradually giving way to a collaborative model in which reimbursement is shared by hospitals, physicians and other providers based on the health management of defined populations…Doubtless, there will be those who will decry ACOs as a by-product of health-care reform and therefore unworthy of consideration. However, ACOs and similar collaborative models are moving forward whether health-care reform is implemented or not.

For Banner, the only point of concern was timing. “The issue before us now is that of timing. How fast can we bring new models of collaboration into existence?” Fine asked in his statement. As it turns out, it’s a question that many people are asking.

In a white paper available from the Robert Wood Johnson Foundation, authors Berenson RA and Burton RA explain that “…so far, the reception to CMS’ final regulations has been positive, but how many organizations will actually apply to CMS to be ACOs is another question.” The paper attempted to explain CMS’s motives for the ACO Pioneer program, and to establish a prediction on the widespread success of the program. FierceHealthcare summarizes:

How many and how fast will ACOs spread? CMS estimates 50 to 270 ACOs will sign up to participate, generating a net savings of $940 million during the first four years through Shared Savings, according to a recent report by the Urban Institute and the Robert Wood Johnson Foundation…

…According to the report, it's unclear if the Shared Savings Program and the earlier Pioneer ACO model are intended to test the ACO concept for large-scale implementation, to see whether it generates sustainable governmental savings, or to move as many providers as possible to ACOs to curb Medicare spending.

A few years will probably pass before we can come to any definitive conclusions on the program, but the Banner exercise at least demonstrates how much is at stake.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.