ACO trade group says Medicare program saved $859M in 2016
The Medicare Shared Savings Program, the largest value-based accountable care organization initiative, saved $859 million in 2016, according to an analysis from Dobson | DaVanzo & Associates for the National Association of ACOs (NAACOS).
The program, which includes 561 ACOs and 10.5 million patients, saved more than $660 million to the Medicare Trust Fund between 2013 and 2016 after accounting for bonuses paid to ACOs for meeting spending and quality targets.
NAACOS said ACOs have saved Medicare $2.66 billion since 2013, significantly higher than the $1.6 billion estimate from CMS.
Multiple studies have pointed to cost savings in CMS program using ACOs. In September, CMS said MSSP saved $314 million for Medicare after bonuses paid to accountable care organizations in 2017. Overall, ACOs saved $1.1 billion and CMS shared $780 million in savings with providers.
ACOs are seen as a way to improve care coordination and contain costs. These programs put more responsibility on providers, who can receive bonuses by hitting quality and spending goals.
Clif Gaus, president and CEO of NAACOS, said in a statement on Wednesday that ACOs need time to show success.
"Given the natural lag time in collecting and analyzing data and the well-established trend that ACOs need a few years to start demonstrating results, we are only seeing the beginning of the nation's return on investment in accountable care," Gaus said. "This data doesn't even mention the quality benefits ACOs have generated, which have also been substantial."
In the new analysis, researchers compared ACO spending to non-ACO providers to figure out potential savings. The researchers found that the gross savings in MSSP have increased in each year of the program, as providers gain experience and learn best practices.
A recent Avalere analysis also found that MSSP ACOs save more money the longer they're in the program. Longevity is a larger influence in saving money than requiring ACOs to take on risk, the report found.
John Feore, director at Avalere, told Healthcare Dive in September that financial success takes time. Providers need to make operational and physician behavior changes, invest in infrastructure, redesign care and get physician buy-in. Upfront costs also make the early years tough to earn savings.
However, Feore said that by the fourth year, ACOs "have gone through beneficiary assignment, benchmark projection, financial reconciliation and quality performance review processes more than once and are likely more comfortable operating under the program’s requirements." He added: "You can't just flip a switch and expect every ACO to be successful in year one."
Change is coming to MSSP — and the potential for more in the coming year. CMS recently announced it's allowing voluntary six-month extensions for MSSP ACOs that have agreements ending in December. The agency also eliminated eight MSSP quality measures in an attempt to reduce regulations.
Other potential changes would put more risk on ACO providers, who oppose the idea. In September, nine organizations sent a letter to CMS Administrator Seema Verma to oppose proposed changes to MSSP. Though the letter supported changes to value-based contracting and reducing the regulatory burden, the organizations spoke out about requiring providers to take on risk after two years rather than six years and decreasing the proposed shared savings rate from 50% to 25%.
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