Medicare ACOs missing federal cost-savings predictions, analysis finds
- The Medicare Shared Savings Program has appreciably missed federal cost-saving projections made in 2010 when it was enacted under the Affordable Care Act, according to a new Avalere analysis.
- The finding raises questions about the long-term success of Medicare’s largest alternative payment model, which has swelled to 561 ACOs currently from 27 six years ago.
- A big part of the problem is that most MSSP ACOs are upside-only Track 1, which doesn't require providers to incur losses if spending exceeds their target.
The Congressional Budget Office estimated MSSP would net $1.7 billion in savings to Medicare from 2013 to 2016. Instead, the program increased federal spending by $384 million, missing CBO’s mark by more than $2 billion, Avalere says.
But this trend could reverse over time as ACOs gain more experience with the program. For example, ACOs in year four of MSSP yielded net savings totaling $152 million.
ACOs that chose Tracks 2 and 3 (down-sided risk) also showed better financial results — $60 million in reduced savings over five years versus a $444 million jump in federal spending with Track 1.
“While data do suggest that more experienced ACOs and those accepting two-sided risk may help the program turn the corner in the future, the long-term sustainability of savings in the MSSP is unclear,” John Feore, director at Avalere Health, said in a statement. “ACOs continue to be measured against their past performance, which makes it harder for successful ACOs to continue to achieve savings over time.”
The analysis also points out that despite higher federal spending, MSSP ACOs have beaten benchmark projections — saving $1.6 billion over the life of the program.
The report contrasts with a three-year HHS Office of Inspector General analysis that showed MSSP ACOs reduced spending and improved quality of care. The report, released in August, found spending dropped by a total of $3.4 billion over the study period for a net reduction of $1 billion. Roughly half of that amount came from 36 of the 428 ACOs in the study, and a quarter traced to just three of the ACOs.
As providers move to value-based reimbursement models, many look to ACOs because of their relatively low risk.
Last fall, the Health Care Transformation Task Force released a comprehensive analysis of high-performing ACOs to highlight strategies and structures that lead to success. As the Avalere analysis suggests, experience is a key a factor in how well ACOs perform. Successful ACOs have several years of experience, Travis Broome, vice president for policy at Aledade and co-chair of the task force’s accountable care work group, said at the time.