Policy & Regulation News

Medicare ACOs improve care, save $372M in healthcare costs

By Elizabeth Snell

- Medicare Accountable Care Organizations (ACOs) improved patient care and generated over $372 million in total program savings, according to the Center for Medicare & Medicaid Services (CMS).

The Medicare Shared Savings Program (MSSP) and the more advanced Pioneer ACO Model were both launched in 2012 and proved that participants created more than $372 million in total program savings for Medicare, officials said. Additionally, the two programs showed that participants scored better on nearly all quality and patient experience measures in 2013.

“We all have a stake in improving the quality of care we receive, while spending our dollars more wisely,” Health & Human Services (HHS) Secretary Sylvia M. Burwell said in a public statement. “It’s good for businesses, for our middle class, and for our country’s global competitiveness. That’s why at HHS we are committed to partnering across sectors to make progress.”

During the second performance year, Pioneer ACOs generated estimated total model savings of over $96 million and also qualified for shared savings payments of $68 million. Moreover, these ACOs achieved lower per capita growth in spending for the Medicare program at 1.4 percent. That is approximately 0.45 percent lower than Medicare fee-for-service.

  • Verma Presses Hospitals to Assume Risk in Value-Based Care Models
  • Physician Practice Interruption Increased Due to COVID-19 Pandemic
  • COVID-19 Associated with $13.9B Decline in Medicare Spending
  • “Medicare ACOs are groups of providers and suppliers of services that work together to coordinate care for the Medicare fee-for-service (FFS) beneficiaries they serve and achieve program goals,” CMS explained in a fact sheet. “Medicare ACOs choose a level of performance risk and receive financial incentives based on that choice and their quality performance. Pioneer ACOs tend to be more established, assume a greater financial risk, and receive financial rewards for lowering costs.”

    The Medicare Shared Savings Program first year results were also positive. Fifty-three Shared Savings Program ACOs held spending $652 million below their targets and earned performance payments of more than $300 million as their share of program savings. Additionally, the program had higher average performance rates on 17 of the 22 Group Practice Reporting Option Web Interface measures reported by other Medicare FFS providers reporting through this system.

    At the beginning of this year, Medicare’s ACOs were reporting similar successes. In their first year of operation, nearly half of the ACOs that started up in 2012 achieved large reductions in expenditures and have generated a total of $128 million for the Medicare Trust Funds. Specifically, 54 of the 114 ACOs that started up in 2012 had lower-than-projected spending and 29 of those produced shared savings of $126 million.