B. Population-Based Payments: CMS allows Pioneer ACOs to transition to population -based payments (PBP) that offer revenue flexibility to provide furnish services not currently paid for under Medicare fee-for-service (FFS), and to invest in care coordination infrastructure. In lieu of explicit requirements that Pioneer ACOs maintain adequate financial reserves to pay the claims of their participant Pioneer providers/suppliers, CMS currently requires Pioneer ACOs to demonstrate a specified level of savings in previous performance years to become eligible for PBPs. Selection of PBPs does not affect the risk profile of the Pioneer ACO’s payment arrangement.
Eligible Pioneer ACOs may elect to receive PBPs that represent a selected percentage (e.g., 40%) percent) of their expected Medicare Part A and Part B FFS revenues or their expected Part B FFS revenues, based on historical claims of participating Pioneer providers/suppliers that agree to accept reduced FFS payments. (The current PBP policy does not allow for ACOs to request a different reduction amount on Part A and Part B services, and does not affect the payments of non-Pioneer providers/suppliers caring for the Pioneer ACO’s aligned beneficiaries) In turn, participating Pioneer providers/suppliers will receive FFS payments on submitted and payable claims for the services furnished to aligned Pioneer beneficiaries, reduced by the same selected percentage (that is, selection of PBPs representing 40% of expected Pioneer ACO revenues would be coupled with a 40% reduction in FFS reimbursements to participating Pioneer providers/suppliers for services furnished to aligned Pioneer beneficiaries). CMS does not currently allow suppliers of durable medical equipment to be included on the list of Pioneer providers/suppliers to receive reduced FFS payments upon which the amount of PBPs paid to the ACO is based. At the end of the year, CMS will include the amount paid to the Pioneer ACO in PBPs and the amount by which FFS payments to participating Pioneer providers/suppliers were reduced as part of the financial settlement of shared savings/shared losses.