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Medicare Shared Savings Program saves ACOs, Medicare money

ACOs saved Medicare $739 million last year after accounting for shared savings bonuses and collecting shared loss payments.

Under the Medicare Shared Savings Program, 37% of accountable care organizations saved enough money to earn shared savings bonuses.

Also, 66% of ACOs saved Medicare money compared to set spending targets or benchmarks. Both of these numbers are increases from previous years, according to data from the Centers for Medicare and Medicaid Services that was released by the National Association of ACOs.

WHY THIS MATTERS

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ACOs collectively saved Medicare $1.7 billion last year alone. The savings were $739 million after accounting for shared savings bonuses and collecting shared loss payments.

The data shows the MSSP program has continued to lower the rate of Medicare spending, which points to the strength of accountable care organizations as payment models for healthcare, NAACOS said.

ACOs are the dominant value-based care program in Medicare. There were 10.1 million beneficiaries who were cared for by 548 different shared savings program ACOs in 2018, and ACOs were given an average quality score of almost 93%.

ACOs that joined the program in 2016 or 2017 improved their measure of performance by an average of 27% in 2018. ACOs in their second contract period generally saved more than twice as much per beneficiary compared to ACOs in their initial contract period, showing savings increases over time.

ACOs that received shared savings payments had decreases in inpatient, emergency room, and post-acute care spending and utilization, according to CMS Administrator Seema Verma. ACOs in shared savings-only and risk-based models showed reductions in spending per beneficiary relative to their benchmarks.

The CMS data compared the year's spending to pre-set spending targets for all 2018 MSSP ACOs.

THE LARGER TREND

In December 2018, CMS forced ACOs to take on financial risk sooner to remain in MSSP.

CMS said at the time the rule was issued that the expected savings to Medicare would be $2.9 billion over 10 years.

Because of this, fewer ACOs joined the Medicare Shared Savings Program in 2019 than in 2018.

The Medicare Shared Savings Program experienced a decline in ACO participation for the first time since it started in 2012, according to CMS data reported by Health Affairs. Fewer than half the number of new ACOs joined this year compared to the average of all previous years. But the data shows that more ACOs in the program are taking on risk for their performance.

NAACOs says the recent results continue a strong and growing trend of the Medicare ACO program saving money.

Researchers at Harvard University, the Medicaid Payment Advisory Commission and NAACOs have found ACOs are lowering overall Medicare spending by 1-2%, according to NAACOs. That translates to tens of billions of dollars of reduced Medicare spending when compounded annually.

ON THE RECORD

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

Max Sullivan is a freelance writer and reporter who, in addition to writing about healthcare, has covered business stories, municipal government, education and crime. Twitter: @maxsullivanlive maxesullivan@gmail.com

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