Dartmouth-Hitchcock exits Medicare's Pioneer ACO program

Dartmouth-Hitchcock Medical Center is the latest to pull out of the CMS Innovation Center's Pioneer ACO initiative, Medicare's earliest and most aggressive test of accountable care, which has lost nearly half its initial cohort.

The Lebanon, N.H., medical center lost money during the Innovation Center's Pioneer ACO initiative, which requires participating hospitals and doctors to repay Medicare for failing to meet performance targets on quality and savings. The Dartmouth-Hitchcock ACO exit follows earlier departures that reduced the number of Pioneers to 19 from the original 32. 

The exodus underscores the challenges that policymakers face as they wrangle with hospitals and doctors over how to change how Medicare pays for care. Federal officials announced this year that half of Medicare spending outside of managed care would be under new payment models by 2018. New models reward hospitals and doctors that meet targets for quality and savings, but may also penalize those that fail. The targets, however, sparked ongoing controversy as the industry and federal officials debate how they should be set.