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MSSP ACOs saved more money than CMS reported, says National Association of ACOs

ACO MSSP generated savings of $1.84 billion from 2013 to 2015, nearly double the $954 million estimated by CMS, according to NAACOS.

Susan Morse, Managing Editor

The Centers for Medicare and Medicaid Services underestimated the amount of savings generated by accountable care organizations in the Medicare Shared Savings Program, according to the National Association of ACOs.

The ACO Medicare Shared Savings Program, in which most hospitals and physician practices do not take on financial risk, generated savings of $1.84 billion for Medicare from 2013 to 2015, nearly double the $954 million estimated by CMS, according to NAACOS.

After accounting for shared savings payments earned by ACOs, MSSP reduced federal spending by $542 million, the ACO organization said. This contrasts with CMS's claims that ACOs increased Medicare spending by $344 million over three years.

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The 2017 performance data from CMS shows the MSSP program generated $314 million in net Medicare savings. Of the 472 MSSP ACOs in 2017, 60 percent saved money while 34 percent earned shared savings.

"The analysis should put to rest claims that shared savings only ACOs do not save Medicare money," said Clif Gaus, president and CEO of the National Association of ACOs. 

The independent evaluation of ACO performance by Dobson DaVanzo & Associates commissioned by NAACOS was released a few weeks after CMS issued a proposed rule to move away from upside-only risk.

In the MSSP overhaul, CMS proposed limiting the amount of time an ACO can remain in upside risk only, from six to two years. It is also moving to cut shared savings in half -- from 50 to 25 percent.

The proposed financial impact would save Medicare $2.2 billion over ten years, according to CMS Administrator Seema Verma.

The National Association of ACOs contends that data shows ACOs need more than two years to begin showing the benefits. This and the proposal to cut shared savings in half would deter new Medicare ACOs from forming, said NAACOS, which wants CMS to extend the time for ACOs to remain in a shared-savings-only model and to restore the shared-savings rate to 50 percent.

The organization pointed to a letter from Ways and Means Committee Chair Kevin Brady sent to CMS Administrator Seema Verma on September 4, in which Brady asks her to reconsider reducing the savings from 50 to 25 percent.

An estimated 107 are expected to drop out of the program due to the changes in the overhaul called Pathways to Success.

At a recent meeting of the Physician-Focused Payment Model Technical Advisory Committee, Alex Azar, secretary of Health and Human Services reiterated what his department has previously said: "If there are fewer ACOs, so be it," he said.

CMS points to the savings of its ACO Next Generation two-sided risk model that in 2016, generated Medicare savings of about $62 million.

In a Health Affairs blog on the ACO MSSP overhaul, Verma outlined two tracks for ACOs to take, basic and enhanced.

In exchange for the risk of losing money, participants will have broader flexibility to innovate, including around provisions of telehealth, regulatory waivers and the ability to offer wellness incentives to beneficiaries.

Comments on the overhaul are due by October 16.

Twitter: @SusanJMorse
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