Almost two thirds of accountable care organizations (ACOs) — including some of those that choose to take less financial risk in the Medicare program — generated $314 million in net savings for Medicare in 2017, according to a trade organization that's opposed to planned changes to federal incentives for ACOs.
On August 30, the US Centers for Medicare & Medicaid Services (CMS) released new data on the 2017 performance of ACOs in the Medicare Shared Savings Program (MSSP). ACOs are expected to reduce the cost of care through increased coordination and accountability, which, for example, may reduce needless duplication of lab tests.
In 2017, 472 ACOs, which covered 9 million people, participated in the MSSP, delivering about $1.1 billion in estimated savings, said the National Association of ACOs (NAACOS) in a statement. After accounting for savings directed back to ACOs as bonuses in 2017, estimated net Medicare savings were $314 million, NAACOS said.
"These recent results show that ACOs have turned the corner, and this evidence dispels confusion about ACO performance. The hard work of ACOs is paying off — for patients, providers and for the Medicare Trust Fund — and it's essential we strengthen this program for the future," said Clif Gaus, ScD, president and chief executive of NAACOS, in a statement.
Pushing Back Against CMS
Gaus cited the 2017 results in arguing against a CMS plan to compel more ACOs to accept a financial challenge in order to have a chance to claim shared savings. CMS in August put forward a proposed rule on ACOs changes. NAACOS said CMS intends to "shorten the glide path for new ACOs to assume financial risk, reducing time in a shared savings only model from the current six years to two years."
CMS also is seeking to reduce shared savings. These changes will deter would-be participants in ACOs, said Gaus, who deemed CMS' action as being akin to "putting up a 'Stop' sign on the road to value-based care."
In the rule, CMS noted that it already has several options for ACOs, including its so-called Track 3, which offers a higher rate for shared saving as well as the potential for greater liability for shared losses.
The majority of ACOs have stuck to CMS models that don't require them to assume financial risk in order to get some chance at shared savings, CMS said in the proposed rule. The agency argued that this approach could inadvertently trigger unwanted changes in the landscape of medical care available for people in Medicare's fee-for-service (FFS) program.
The "presence of an 'upside-only' track may be encouraging consolidation in the marketplace, reducing competition and choice for Medicare FFS beneficiaries," CMS said. Thus, the agency is seeking a shift away from broad use of the reward-only options.
"After six years of experience, the time has come to put real 'accountability' in Accountable Care Organizations. Medicare cannot afford to support programs with weak incentives that do not deliver value," said CMS Administrator Seema Verma in a statement. "ACOs can be an important component of a system that increases the quality of care while decreasing costs; however, most Medicare ACOs do not currently face any financial consequences when costs go up, and this has to change."
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Cite this: ACOs Produce $314 Million in Net Medicare Savings, Group Says - Medscape - Sep 04, 2018.
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