Value-Based Care News

Medicare Shared Savings Program ACOs Saved $739M in 2018

ACOs in the Medicare Shared Savings Program lowered Medicare spending while providing high-quality care in the last year before the program overhaul took place.

Medicare Shared Savings Program ACOs

Source: Getty Images

By Jacqueline LaPointe

- Accountable care organization (ACOs) in the Medicare Shared Savings Program saved $739.4 million in 2018 after accounting for shared savings and losses that year, according to program data released by CMS Monday.

The savings were spread across 548 ACOs, which served about 10.1 million Medicare beneficiaries in 2018. Of those ACOs, 66 percent saved Medicare money by decreasing their costs compared to CMS-set spending benchmarks and 37 percent saved enough to earn shared savings payments. Both of those figures are increases from previous years, the National Association of ACOs (NAACOS) stated in their analysis of the public data.

“These numbers put to rest any notion that ACO savings are ‘modest’ and illustrate the strong performance of the leading Medicare alternative payment model,” Clif Gaus, ScD, president and CEO of NAACOS, said in the analysis. “Given time, we know ACOs save money and provide benefit for patients and taxpayers.”

The data also revealed that ACOs taking accountability for cost increases through MSSP tracks with downside financial risk performed better than their risk-adverse peers in 2018, CMS Administrator Seema Verma reported in a Health Affairs blog post.

ACOs in risk-based MSSP tracks showed an average reduction in spending relative to their benchmarks of $96 per beneficiary, while ACOs in non-risk tracks saved just $68 per beneficiary, on average, Verma stated.

These savings point to why CMS overhauled the MSSP last year, the head of CMS explained in the blog post.

“This trend is one of the reasons that the greater accountability for ACOs included in Pathways to Success, along with greater flexibility for them to innovate, will lead to better, more efficient care for Medicare beneficiaries,” she wrote using the new name for the MSSP.

Under Pathways to Success, ACOs will be required to assume risk sooner, with downside risk generally mandated after two years for new ACOs. In exchange for a quicker risk path, ACOs will be able to leverage greater flexibilities, such as offering telehealth services and incentive payments to beneficiaries.

The overhauled MSSP will also provide flexibilities to “low-revenue” ACOs, which Verma reported performed better than their hospital-led peers according to 2018 performance data.

Low-revenue ACOs, which tend to be physician-led and rural ACOs that provide mostly outpatient services, will be able to delay downside risk adoption for an additional year (generally three years). These ACOs had an average reduction in spending relative to their spending benchmarks of $180 per beneficiary in 2018 while high-revenue ACOs saved just $27 per beneficiary, Verma reported.

The opportunity to remain in an upside-risk track for an additional year should encourage MSSP participation, Verma explained in the blog post. However, ACO groups are already skeptical that new program rules will spur greater participation.

CMS is holding two application cycles for ACO participation in Pathways to Success. In July, the agency announced the participants from the first round – 206 ACOs, including 41 entirely new and 25 re-entering organizations.

ACOs will have another opportunity to join the first class of Pathways to Success ACOs later this year. However, participation rates are already concerning NAACOS. The association reported in their own Health Affairs blog post in September that the MSSP experienced a dip in participation for the first time since the program launched in 2012 and fewer than half the number of new ACOs entered the program in 2019 compared to the average of all previous years.

The participation numbers for Pathways to Success could spell trouble for the MSSP, especially considering 2018 performance results, Gaus stated.

“Today’s results prove the Shared Savings Program was doing very well before last year’s changes by CMS,” he said in the new analysis. “We should work to find ways to encourage ACO participation, which as evidenced by these results helps improve our health care system and the future of Medicare.”

Other key findings from CMS and NAACOS based on Monday’s release of 2018 performance data included:

  • 93 percent of eligible ACOs earned quality improvement reward points, with ACOs showing the greatest improvements in preventive health measures
  • ACOs that joined the program in 2016 or 2017 increased their quality measure performance by an average of 27 percent
  • ACOs that earned sharing savings kept an average of 48 percent of their savings
  • ACOs in their second contract period generally saved more than twice as much per beneficiary versus ACOs in their first contract period