And another three bite the dust. Following the nine departures from CMS's Medicare Pioneer ACO program last summer and Sharp HealthCare's exit in August, Genesys PHO, Franciscan Alliance and Renaissance Health Network have bid adieu to CMS's brand of accountable care. Predictions are swirling on the program's demise. But before your local pundit stands on the corner with a sandwich board crying the The end is nigh, it's worth looking at why the Pioneers left and how more departures might be prevented.

Providers are quitting for three main reasons: they're losing money, they're unhappy with the Pioneer design, and they have a lot more ACO control playing locally than federally. If you've invested substantially in population health management, HIT and clinical integration, you want to a see a payoff.

Providers also cite benchmarks and formulas that don't reflect the unique dynamics of their markets or their patient case mix. These and other limitations have started to wear: waiting for data from CMS, not knowing which patients were attributed to your ACO and whether they will opt out. It's tough for innovative providers to succeed within a highly regulated system. Maybe expectations were too high, too soon.

Providers also have a lot more options. With some payers, they're in the driver's seat; that's not the case with CMS. More integrated delivery networks are forming health plans. If patients are enrolled in your plan with a narrow network and strong incentives for following health management programs, there's no better way to exercise control.

So now what? Medicare ACOs have absolutely driven commercial ACO growth, but they may be a rising tide that lifts all boats but their own. Modifications to the program have to be win-win. CMS doesn't want a failure, and providers moving toward fee for value don't want to ignore an entire segment of their patient population.

It should be noted that the Medicare ACO program has saved money in the grand scheme, not much but its population represents just 8% of the Medicare beneficiary pool. We're going to know a lot more about viability in the summer of 2015 when Pioneer year 3 results will coincide with other Medicare ACO results from 2013 and 2014.

Until then, the rest of the wagon train is still rolling.

Follow Laura Beerman on Twitter @LauraBeermanDRG

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