ACOs Exceed Goals in Curbing Spending, CMS Says

Mark Crane

January 30, 2014

Almost half of Medicare's accountable care organizations (ACOs) have slowed healthcare spending, but less than one quarter saved enough to receive bonus payments, the Centers for Medicare & Medicaid Services (CMS) has announced.

In their first 12 months, 54 of 114 of the ACOs that started operations in 2012 already had lower expenditures than projected, the agency said in a statement. "Of the 54 ACOs that exceeded their benchmarks...29 generated shared savings totaling more than $126 million." These ACOs "generated a total of $128 million in net savings for the Medicare Trust Funds."

ACOs were created under the Affordable Care Act. They share with Medicare any savings generated from lowering the growth in healthcare costs while meeting standards for high-quality care.

Pioneer ACOs, the model designed for more experienced organizations prepared to take on greater financial risk, generated gross savings of $147 million in their first year, the agency said. Results from an independent preliminary evaluation showed that of the 23 Pioneer ACOs, 9 had "significantly lower spending growth relative to Medicare fee for service while exceeding quality reporting requirements."

Savings from both the Medicare ACOs and Pioneer ACOs exceed $380 million, CMS said.

"These innovative programs are showing encouraging initial results, while providing valuable lessons as we strive to improve our nation's health care delivery system," US Department of Health and Human Services Secretary Kathleen Sebelius said in the statement. "Today's findings demonstrate that organizations of various sizes and structures across the country are working with their physicians and engaging with patients to better coordinate and deliver high quality care while reducing expenditure growth."

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