Loss Of Medicare Bonus Drive Healthcare System To Leave Pioneer ACO

By Karla Paris

Franciscan St. Francis Health of Indiana evaluating ACO participation in light of failure to earn Medicare bonus.

Oh what a difference a year makes! In 2013, Franciscan St. Francis Health – one of the largest healthcare systems in Indiana – earned a $6.6 million bonus from Medicare for its success keeping central Indiana patients out of the hospital and the emergency room in 2012. With its success, the hospital system set out to expand its participation in accountable care programs to all its Indiana territories.

In a surprising turn of events, 12 months later, Franciscan St. Francis Health was one of 11 accountable care organizations, or ACOs, with operations in Indiana that did not save money for Medicare or achieve a bonus. In an e-mailed statement issued to the Indianapolis Business Journal, Jenny Westfall, regional VP for Franciscan ACO pointed out, “We did not do as well in meeting our benchmark for reducing the costs of patient care;” adding that “for Franciscan trends are headed in the same direction for 2014.”

In an effort to change its current direction, the healthcare system is switching from its current Pioneer program to the Medicare Shared Savings program (MSSP). ACO’s were authorized by Obamacare to receive a portion of the savings they produced for a set group of patients compared to the previous year’s costs plus an expected percentage increase.

Organizations considering the choice of MSSP and Pioneer typically use a “decision matrix” with the following elements as a tool to determine the best option for them:

• scenarios for future reimbursement structures and levels
• organization’s risk appetite and the risk appetite of its affiliated providers
• access to capital given the ACO’s regulatory environment
• administrative capability
• opportunity to reduce cost through utilization reduction, relative to current utilization levels
• risk level of patients likely to be attributed to the ACO
• potential synergies with other payers

Data released last month by the Centers for Medicare & Medicaid Services indicate that Franciscan, which already has two ACOs in the Shared Savings program, was unable to save money for Medicare or earn a bonus for their 2013 performance.

Since its foundation in 1914, Franciscan St. Francis Health has grown to become one of the largest health-care systems in Indiana. Its Indianapolis hospital opened in 1995 and features state-of-the-art technology and facilities, including the only full-service cardiac and vascular care program on the city's south side. Franciscan St. Francis Health is dedicated to providing the best health care possible. It’s accredited through the Healthcare Facilities Accreditation Program and has received top national rankings and a list of honors, including: 100 Top Hospitals, HealthGrades honors, and Blue Distinction Centers from the Blue Cross Blue Shield Association.

SOURCE: Indianapolis Business Journal