Sharp HealthCare ACO drops out of Medicare's Pioneer program

Another Medicare Pioneer accountable care organization has exited the program, renewing questions about its long-term sustainability.

Sharp HealthCare, a five-hospital system in San Diego, said in its third-quarter financial statement (PDF) that it dropped out of the Pioneer ACO program. Sharp notified the CMS and itsCenter for Medicare and Medicaid Innovation on June 20. Twenty-two Pioneer ACOs remain from the original 32. Last summer, nine other Pioneers said they were leaving. Several of them switched to Medicare's less financially risky Shared Savings Program.

Sharp's ACO, which covers 28,000 Medicare beneficiaries, is transitioning those patients to other care-management programs. The limited liability company that encapsulates the ACO will also be unwound.

The Pioneer ACO Model, developed and administered by the CMS Innovation Center, has been one of the government's most widely watched efforts to reform healthcare payment and delivery under the mantle of thePatient Protection and Affordable Care Act. The Innovation Center chose 32 organizations across the country to participate because they were deemed ahead of the curve on the infrastructure and experience required to coordinate care and manage financial risk. 

Under the contracts, they could be on the hook to return Medicare dollars to the feds if they don't meet quality benchmarks and reduce costs.