CMS: Medicare ACOs Boost Care Quality, Yield Shared Savings

August 27, 2015 - Medicare Accountable Care Organizations (ACOs) – collaborative groups of physicians, hospitals, and other healthcare providers who voluntarily unite to help provide better coordinated care – are collectively advancing Medicare beneficiaries’ care quality and yielding financial savings, confirm newly released quality and financial performance results from the Centers for Medicare & Medicaid Services (CMS). According to garnered results, higher quality care is being effectively delivered annually to Medicare beneficiaries thanks to ACOs, confirms CMS.

According to CMS, ACOs are especially helping those Medicare beneficiaries who are chronically ill receive care while avoiding unnecessary duplication of services and thwarting medical errors.

Financial highlights from CMS’s results:

• During the third performance year, Pioneer ACOs generated total model savings of $120 million, an increase of 24% from Performance Year 2 ($96 million), which was itself an increase from Performance Year 1 ($88 million).
• Of 15 Pioneer ACOs who generated savings, 11 generated savings outside a minimum savings rate and earned shared savings. These 11 ACOs qualify for shared savings payments of $82 million. Of 5 Pioneer ACOs who generated losses, three generated losses outside a minimum loss rate and owed shared losses.  These ACOs are paying CMS $9 million in shared losses.
• Total model savings per ACO increased from $2.7 million per ACO in Performance Year 1 to $4.2 million per ACO in Performance Year 2 to $6.0 million per ACO in Performance Year 3.

“These results show that accountable care organizations as a group are on the path towards transforming how care is provided," states Andy Slavitt, CMS’s Acting Administrator, in reference to collective findings. “Many of these ACOs are demonstrating that they can deliver a higher level of coordinated care that leads to healthier people and smarter spending,” he maintains.

ACO growth is here to stay, says CMS

CMS claims its results demonstrate the 20 ACOs in the Pioneer ACO Model and 333 Medicare Shared Shavings Program ACOs generated over $411 million in total savings within 2014. This amount includes all ACOs’ financial gains and losses, says CMS. Concurrently, 97 ACOs qualified for shared savings payments topping $422 million by meeting both quality standards and their savings threshold. CMS maintains more experienced ACOs operate more efficiently.

The number of beneficiaries served by ACOs is expected to increase, says CMS, as consistent increases are noted year after year. CMS confirms since the Affordable Care Act’s (ACA) implementation, over 420 Medicare ACOs have come into existence to serve a population of nearly 8 million via Original Medicare as of January 1 of this year. Strong buzz from both new and established applicants reverberates around the Shared Savings Program, CMS says.

“The Affordable Care Act takes important steps toward a more accessible, affordable, and higher-quality health care system,” CMS states. “Today’s announcement is part of a broader effort to seize on this historic moment and transform our health care system into one that works better for the American people. We have a vision of a system that delivers better care, spends our dollars in a smarter way, and puts patients in the center of their care to keep them healthy.”

Considering the other ACO perspective

Considering the flipside, the future of ACOs is not always depicted in alignment with financial sunshine and revenue rainbows. As RevCycleIntelligence.com reported,  interoperability challenges are perhaps hindering the performance of ACOs. Restrictive capital may be creating significant snags in the streamlining of financial operations for ACOs. Seventy-two percent of practices earning reimbursements during the Medicare Shared Savings program’s initial year were physician-led, as RevCycleIntelligence.com also reported. Although such are “uniquely positioned to lead accountable care organizations,” other research suggests they may not be well-equipped to do so. Other data demonstrates Medicare Shared Savings ACOs are associated with mixed financial performance results, confirmed EHRIntelligence.com.

Accountable care success – keeping quality high and cost low – is not effortless. This year, as RevCycleIntelligence.com stated, will indeed be a “deciding year” as to whether or not ACOs will effectively execute the transition from exploration to mainstream implementation.