After a mixed response to proposed regulations for its accountable care organization shared savings program, the Centers for Medicare & Medicaid Services is drawing more favorable reviews for its Pioneer ACO Collaborative, designed in part to address concerns emerging from the original program. The collaborative, which launches in early 2012, is designed to reward participating providers with incentive payments for reaching cost and quality benchmarks.

CMS officials declined to comment on how many organizations have applied for the 30 positions in the Pioneer ACO Collaborative, but an agency official says they were "very pleased" with the applicant pool. Hospitals and health systems that confirmed their applications to participate in the Pioneer program include Advocate Health in Chicago, Henry Ford Health System in Detroit, Mountain States Health Alliance in Tennessee and Scripps Health in San Diego.

Dennis Vonderfecht, president and CEO of Mountain States Health Alliance, says CMS addressed many of the concerns about the original shared savings program with the Pioneer ACO, including criticisms that it did not allow enough room for experimentation by providers.

"We initially were very excited about the whole concept of the ACO," Vonderfecht says. "The excitement kind of got dashed for us, along with everyone else, when all the [regulations] came out and it was so prescriptive. Once that message got to CMS … and the [Centers for Medicare & Medicaid Innovation] came out with the Pioneer ACO, we got a little more excited again, because we felt like there was an opportunity to truly have some innovative models." Scripps Health CEO Chris Van Gorder says his system, which has applied through its ScrippsCare partnership with North American Medical Management, became interested after CMS indicated that ACOs would be allowed to prospectively attribute Medicare beneficiaries to the program, a key reversal from the original shared savings program.

Mark Kelley, M.D., chief medical officer with the Henry Ford Medical Group, says the Pioneer program gives providers a chance to work closely with CMS on key clinical and strategic goals, including reducing readmissions and serving beneficiaries who are eligible for both Medicare and Medicaid. And Marty Manning, president of Advocate Physician Partners — which applied along with its parent health system, Advocate Health, says the program allows hospitals and other participants a rare opportunity to work with the agency on the development of emerging payment structures.

"The deals are probably not going to get sweeter as pressure increases over time," Manning says. "There's a certain value to being an early adopter, because it gets you started sooner, and maybe the terms are better."

The program also would allow Advocate to expand the number of patients covered under accountable care agreements; along with the 100,000 to 200,000 Medicare beneficiaries it projects it would cover if it is accepted in the Pioneer ACO, the system has another 215,000 patients engaged in an ACO with Blue Cross Blue Shield of Illinois. At a time when hospitals are straddling between longstanding fee-for-service payments and emerging value-based payment models, the Pioneer ACO would "really tip the scales for us operationally and strategically," Manning says.

CMS is evaluating applicants for prior performance, strategies around patient-centeredness and their proposals for treating vulnerable populations, including beneficiaries who are eligible for both Medicare and Medicaid. After meeting with applicants, CMS will select potential participants and begin developing provider agreements.