Accountable Care Organizations Saved Medicare $3.5B, Netting $755M
An independent analysis finds accountable care organizations in the Medicare Shared Savings Program have saved more than other sources have credited them.
Source: Getty Images
By - Accountable care organizations (ACOs) in the Medicare Shared Savings Program saved CMS approximately $3.52 billion from 2013 to 2017, according to a new analysis from analytic firm Dobson DaVanzo & Associates.
After accounting for shared savings, the Medicare Trust Fund netted about $755 million from the ACOs during the period, the analysis found.
“These results are undeniable,” stated Clif Gaus, ScD, president and CEO of the National Association of ACOs (NAACOS), which commissioned the analysis. “There hasn’t been another voluntary initiative in Medicare that has generated billions in savings over such a short period of time.”
The Medicare Shared Savings Program – now called Pathways to Success – is Medicare’s largest ACO initiative with 518 organizations currently participating. The ACOs care for nearly 11 million Medicare beneficiaries.
However, the program’s success has recently come into question. Calculations done by CMS based on programmatic benchmarks have found that the Medicare ACOs have not netted Medicare any savings. The CMS results show that the program actually cost Medicare money every year from 2013 to 2017 except performance year 2017.
The results prompted CMS to overhaul the large Medicare program last year. CMS altered original MSSP rules to require participating ACOs to assume downside financial risk sooner, a move the agency believes will kickstart savings based on their program calculations.
“Medicare can no longer afford to support programs with weak incentives that do not deliver value. As we structure new payment arrangements, the impact on the overall market will be top of mind,” CMS Administrator Seema Verma stated in the Pathways to Success announcement in December 2018.
Critics of the MSSP overhaul, however, argued that the overhaul may have been designed with inaccurate figures in mind. This group has pointed to research from the Medicare Payment Advisory Commission (MedPAC) in June 2019 that showed ACOs in the program generally saved about one percentage point per member per year relative to comparison groups. Researchers from Harvard University also found similar results.
The most recent Dobson DaVanzo & Associates analysis was consistent with MedPAC’s research. The analysis found that MSSP ACOs saved between one to two percent over time compared to spending on unattributed beneficiaries.
The results differ from CMS calculations because of Dobson DaVanzo & Associates’ difference-in-differences study design, the analysis explained. The study design compared ACO spending to that of similar non-ACO providers and patients to determine what spending would have been in the absence of the ACOs.
MedPAC used a similar approach to analyze ACO savings, the analysis added.
“The CMS benchmarking methodology addresses the question ‘How has ACO spending changed compared to prior years’ spending?’ While this may be an appropriate way to set performance benchmarks, it produces a biased estimate of program savings when compared to what may have occurred if the ACO program had not been in place,” Dobson DaVanzon & Associates stated in a similar report from last year, which also found net ACO savings from 2013 to 2016.
NAACOs is using the updated savings figures to push for greater ACO participation. Several recent studies have shown that overall ACO participation has dipped, particularly because of falling Medicare program numbers. CMS itself reported in July 2019 that MSSP participation dropped from 561 ACOs in 2018.
“Time and time again, ACOs have proven superior to Medicare’s other value-based care initiatives. CMS and Congress should look for ways to bolster ACO participation to further drive these savings,” Gaus said.
