CMS Reports Some Progress in Medicare Shared Savings Program

Ken Terry

August 30, 2016

The Centers for Medicare & Medicaid Services (CMS) released its newest figures last week on the performance of accountable care organizations (ACOs) in its Medicare Shared Savings Program (MSSP) and Pioneer ACO program. The data shows continued slow progress on cost reduction and quality improvement. But still, less than a third of ACOs in the MSSP shared in savings in 2015, and ACOs continued to drop out of the Pioneer program.

Including both programs, which served more than 7.7 million Medicare beneficiaries, or about 14% of the total, over 400 participating Medicare ACOs (392 MSSP participants and 12 Pioneer ACO model participants) saved CMS $466 million in 2015, according to an agency news release. Those in the MSSP saved $429 million. In total, the Medicare ACOs — which include both physician practices and hospitals — generated $1.29 billion in Medicare savings from 2012 to 2015.

Among MSSP ACO participants, 119 shared in the savings from the MSSP in 2015. Six of the 12 Pioneer programs earned shared savings. Eighty-three other ACOs beat their benchmarks, but not by enough to receive shared savings. Thirty-one percent of all ACOs generated savings above a minimum savings rate compared with 28% in 2014 and 26% in 2013. CMS said that as ACOs gained experience in the MSSP they were more likely to qualify for shared savings.

CMS did not state how much the ACOs that earned shared savings received.

To participate in savings, ACOs must not only save more than a minimum amount but also achieve certain quality goals. The MSSP ACOs improved on 84% of the quality measures they reported in both 2014 and 2015, CMS said. In addition, their average quality score improved by more than 15% on four preventive measures: screening for risk for future falls, depression screening and follow-up, blood pressure screening and follow-up, and providing pneumonia vaccinations.

Most ACOs participating in the MSSP were in track 1 of the program, which entitles them to a share in the savings but doesn't require them to take a share of the losses. (Losses represent spending in excess of historical benchmarks.) About 5% of the ACOs chose track 2 or 3, in which they took progressively greater downside risk in return for higher portions of shared savings. No track 2 ACOs had to share losses with CMS.

The Pioneer program piles even more risk on ACOs that have more experience with managed care and care coordination. Only 12 of the original 32 Pioneer ACOs remained in the program at the end of 2015. While eight Pioneers generated savings, six had sufficient savings to receive a portion of them. Of the four Pioneers that generated losses, one had losses great enough to owe CMS money.

A list of individual ACOs and how they did in the MSSP in 2014 shows that many missed their benchmarks by millions of dollars. If they'd taken more downside risk, some of that money would have gone back to CMS.

Moreover, a Health Affairs analysis of the 2014 data found that the $341 million in shared savings in the MSSP were highly concentrated among the 86 successful ACOs. Five ACOs earned over $60 million in shared savings in total, and 30 earned over $200 million together. In addition, the researchers found, success in the MSSP had been "primarily determined" by CMS raising benchmarks — a strategy that they noted was unsustainable.

The number of participating ACOs, according to the CMS fact sheet, rose from 220 to 333 in 2014, but increased to only 392 in 2015. CMS reported strong interest from new applicants and from ACOs that wish to continue in the program. These numbers will be revealed at the end of the year, the agency said.

A CMS breakdown of MSSP ACO composition in 2014 found that 54% of the ACOs included practice networks, 31% group practices, 38% hospitals/professional partnerships, 31% hospitals employing doctors, 14% federally qualified health centers, 15% rural health clinics, and 13% critical access hospitals. The vast majority of the ACOs were located in metropolitan areas.

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