Medicare ACOs in newest tracks achieved bigger savings in 2019

CMS announced Monday that accountable care organizations in the revised Medicare Shared Savings Program generated higher savings last year than organizations still in the legacy model.

Of the 541 ACOs in the Medicare Shared Savings Program in 2019, 205 participated for the first time in the revised program, called Pathways to Success, that involves requiring ACOs to take on downside risk sooner than in the original program. Those 205 ACOs achieved on average net savings of $169 per Medicare beneficiary last year compared with $106 in savings on average for the 336 ACOs in the legacy tracks, according to CMS Administrator Seema Verma in a Health Affairs blog post.

Additionally, the 66 new entrants to the ACO program, which joined under Pathways to Success, achieved on average $150 in net savings, marking the first time ACOs new to the program performed better than the benchmark, Verma said.

“These early results suggest that greater financial accountability under the Pathways to Success policies has produced the stronger incentives for ACOs to deliver better coordinated and more efficient care for Medicare beneficiaries,” she said.

CMS overhauled the long-standing Medicare Shared Savings Program in December 2018 in response to concerns that the program wasn’t saving the agency money because the vast majority of ACOs stayed in upside-only risk tracks for many years. The modified program has received pushback from the National Association of ACOs (NAACOS), which argues some of the changes deter new entrants to the program. Indeed, participation to MSSP has dropped from a peak of 141 new ACOs in 2018, to just 35 new ACOs joining in 2020, according to NAACOS.

Overall, the 541 ACOs saved Medicare $1.19 billion last year, which is higher than 2018 when the program saved Medicare about $740 million. CMS generated more in savings with more ACOs on the hook for losses if they fail to meet benchmarks.

Of the 541 ACOs, 150, or 27.7%, were in a downside risk track last year, compared with 2018 when 548 ACOs participated in the program and 95, or 17%, were in a downside risk track.

Another reason Medicare saved more last year is that ACOs overall saved more on average per beneficiary than in 2018, according to David Pittman, health policy and communications adviser at NAACOS. There were also changes to the benchmark that account more for regional spending, he added.

And although the overall number of ACOs in MSSP was smaller last year than the prior year, about 1 million more Medicare beneficiaries were in the program. There were 11.2 million beneficiaries in MSSP last year compared with 10.1 million in 2018. There is evidence some ACOs have combined to form larger organizations as they take on downside risk, hoping scale will offset the potential for devastating losses.

CMS has made substantial changes to the program this year in response to the COVID-19 pandemic through emergency rulemaking including allowing ACOs to carry over their current level of risk for an extra year and mitigating the potential for losses.


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