Value-Based Care News

Mixed Results for MSSP Accountable Care Organization Savings

High-cost accountable care organizations in Medicare’s Shared Savings Program had an easier time earning shared savings than low-cost ones.

By Catherine Sampson

- According to a report from Leavitt Partners, 42 percent of accountable care organizations (ACO) residing in high-cost markets in the Medicare’s Shared Savings Program (MSSP) earned shared savings, while only 18 percent of organizations residing in low-cost markets earned shared savings. ACOs in the highest cost segment earned an average of $2.1 million, while ACOs from the lowest cost quintile earned $357,000. Twenty-six percent of ACOs earned shared savings, the report said.  However, these savings were very concentrated among a small amount of ACOs.

Forty two percent of ACOs residing in high-cost markets in the Medicare’s Shared Savings Program earned shared savings, researchers said.

“The top ten ACOs’ earned shared savings accounted for 30 percent of all 333 ACOs’ earned shared savings,” Leavitt Partners said. “While some ACOs are performing meaningfully well, most are not.”

Researchers noted that ACOs that covered more individuals typically did not earn more shared savings. However, they were able to earn higher average quality scores.

The top ten earning ACOs typically had higher quality scores. However, higher quality scores did not necessarily equate to shared savings, the researchers said. About 40 percent of ACOs in the most expensive markets “still failed to earn shared savings,” the report said.

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    • This data implies that a market’s costs do not necessarily explain financial success, the researchers said. “For example, Memorial Hermann, a Houston-based hospital system, is located in an average cost market, but earned more shared savings than any other participating MSSP ACO,” the report said.

    “Although top-performing higher earners averaged higher quality scores, the higher quality scores did not generally correlate with earned shared savings,” the report said.

    This held true for this report because many organizations that had lower quality scores also earned shared savings.

    The report divided ACOs into high-cost and low-cost markets. They found that organizations in the higher-cost markets also had greater levels of healthcare utilization. Researchers also observed that physician groups qualified more often for shared savings than hospital-only ACOs. Hospital-only ACOs also “underperformed” in quality scores.

    “Hospital system ACOs performed substantially worse than ACOs managed by both hospitals and physician groups as well as ACOs managed by physician groups,” the report said. Only 21 percent of hospital systems earned shared savings, while 33 percent of physician groups earned savings.

    “Given that hospitals typically have access to more capital than physician groups and invest more upfront technology and infrastructure into value-based reforms, it is somewhat surprising that, on average, they earned lower average quality scores and a lower percentage of entities qualified for shared savings,” researchers said.

    The incentives physician groups have to reduce unnecessary admissions, referral patterns, and engage patients might explain why they saved more than hospital systems.

    If physician groups and hospitals could collaborate more and base decision making on a patient’s best interests rather than financial economics, they may produce “synergistic efficiencies otherwise unattainable when working in siloed fashions,” researchers suggested.

    Leavitt Partners asserted that the MSSP results were very important, as they can determine whether an ACO will participate. ACOs that are thinking about joining MSSP usually want to assess their peers’ performance in the program. They also want to assess MSSP’s viability.

    “Positive results encourage more providers to enter the value-based world. Negative and/or ambiguous results not only discourage new member entry, but could also incentivize program departures,” Leavitt Partners said.

    Leavitt Partners noted that no one should expect immediate success for the transition to value-based care. It’s a shift that will “require patients and culture and practice-related adjustments over a generation,” the report said.

    However, the numbers from this report do show that the MSSP experience “pays off in earned savings and better quality” over time.

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