CMS: ACOs are producing savings, physician-based models faring best
Monday, October 07, 2019
Accountable care organizations (ACOs) are paying off big time, the Centers for Medicare & Medicaid Services (CMS) said, with the programs generating more than $739 million in net savings in 2018.ACOs are designed to lower growth in expenditures and improve care quality.
For its part, an ACO agrees to be held accountable for the quality, cost, and experience of care of an assigned Medicare beneficiary population. According to Health Affairs, ACOs that successfully meet quality and savings requirements share a percentage of the achieved savings with Medicare.
In December 2018, the Trump administration overhauled the Shared Savings Program, the primary Medicare program for ACOs. The overhaul was fueled by analysis of the program’s first six years in existence and was based on experience testing of Medicare ACO initiatives by the Center for Medicare and Medicaid Innovation (Innovation Center).
The Shared Savings Program savings were the net savings across 548 ACOs. ACOs taking accountability for cost increases performed better than ACOs that did not. For example, ACOs taking on downside risk showed an average reduction in spending relative to their targets of $96 per beneficiary, compared to $68 for ACOs that did not take on downside risk.
Likewise, ACOs led by physicians (“low-revenue” ACOs) perform better than ACOs led by hospital systems (“high-revenue” ACOs). In 2018, low-revenue ACOs showed an average reduction in spending relative to targets of $180 per beneficiary, compared to just $27 for high-revenue ACOs.
The number of Medicare beneficiaries receiving care from a provider in an ACO as of July 1, 2019, increased by 400,000 to more than 10.9 million Medicare fee-for-service beneficiaries.
CMS’s Office of the Actuary projected $2.9 billion in savings over 10 years from the Pathways to Success program redesign, CMS said. ACO trends for 2019 have the agency on track to generate the initially projected amount.
“CMS is continuing to monitor the Shared Savings Program,” CMS said. “We are excited to see growing interest, and we will continue to support health care providers on the front lines who are hard at work building new ways to deliver higher quality care at a lower cost. Patients are receiving better care as a result of these efforts, and we look forward to continuing on this journey.”
“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,” CMS Administrator Seema Verma wrote in a blog post published by the journal Health Affairs.
The Trump administration pushed the changes to the Medicare Shared Savings Program (MSSP), the program that oversees ACOs.
Verma criticized the program for letting an ACO remain in "one-sided" risk for too long; "one-sided" risk refers to when an ACO can get a share of any cost savings but does not have to pay the government for not meeting savings targets.
A new ACO must take on financial risk after three years of participation in “Pathways to Success.” Previously, an ACO could wait six years before facing financial risk.
“Pathways to Success” offers ACOs two opportunities to sign up: July 1 or Jan. 1, 2020. Verma wrote: "We are excited to see growing interest."
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