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Glass Half-Empty, Half-Full, or Opaque? CMS Spins the New ACO Numbers

August 26, 2015
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With the release of the latest results coming out of the MSSP and Pioneer ACO Programs, CMS officials choose unnecessarily to spin the numbers

It was a fascinating exercise to read through the news announcement that came out late Tuesday from the federal Centers for Medicare & Medicaid Services (CMS) around the latest statistics coming out of Medicare’s two main accountable care organization (ACO) programs, the Medicare Shared Savings Program (MSSP) for ACOs, and the Pioneer ACO Program. It was fascinating because of the way in which senior CMS officials apparently decided to try to “spin” the numbers in the most positive way possible, to the point where the agency seems to have purposely obfuscated some of the numbers. But let’s talk about the results first.

As Senior Editor Rajiv Leventhal reported in his news article this morning, CMS reported that, “In total, 353 Medicare accountable care organizations (ACOs) generated more than $411 million in net savings in 2014, although many of those ACO organizations did not generate enough savings to receive bonuses. According to the CMS data,” Leventhal reported, “92 of the 333 Medicare Shared Savings Program (MSSP) ACOs held spending $806 million below their targets and earned performance payments of more than $341 million as their share of program savings. In the Pioneer ACO program, which began with 32 ACOs in 2012, but is now down to 20 after several organizations dropped out, 11 organizations generated savings outside a minimum savings rate and earned shared savings payments of $82 million. In total, 103 Medicare ACOs, or 29 percent, received bonuses in 2014.”

Leventhal’s report went on to note that, “What’s more, bonuses aside, the data revealed that 15 out of the 20 Pioneer ACOs (75 percent) and 181 of the 333 (55 percent) MSSP ACOs generated some savings in 2014, meaning that 25 percent of those in the Pioneer program and 45 percent of MSSP ACOs generated no savings last year. As a whole, Medicare ACOs generated over $417 million in savings in 2013, a number slightly higher than what 2014 savings delivered.”

And, his report noted, “Furthermore, in their third performance year, Pioneer ACOs showed improvements in 28 of 33 quality measures. The results show that ACOs with more experience in the program tend to perform better over time, CMS said. Of the 333 Shared Savings Program ACOs, 119 are in their first performance year in Track 1, which involves standing up the program without the financial risk associated with later tracks. Medicare Shared Savings Program ACOs that reported quality measures in 2013 and 2014 improved on 27 of 33 quality measures, according to CMS. “

So here’s the interesting part of this: CMS itself, in its announcement, completely avoided stating the core numbers and percentages of ACOs, both in the MSSP and the Pioneer Program, that failed to generate any savings at all (though fortunately, apparently, none of the ACOs in either program performed so poorly that they actually went into a category in which they cost CMS beyond the normal cost parameters of the Medicare program). As a result, the agency avoided stating the following: in 2014, 181 of the 333 MSSP ACOs generated some level of savings, while 152 ACOs in that program generated no savings; and 15 of the 20 ACOs in the Pioneer ACO Program generated some level of savings, while five generated none. Expressed in terms of percentages, 55 percent of MSSP ACOs generated some level of savings, while 45 percent generated none; meanwhile, 75 percent of Pioneer ACOs generated some level of savings, while 25 percent generated none.

On one level, I can empathize with senior CMS officials, because these results, particularly in the MSSP program, are not exactly spectacular. To state clearly that 45 percent of the ACOs participating in that program generated no savings for the program, would sound discouraging, of course. But the reality is that this kind of work is very difficult, and everyone knows that, particularly everyone involved in the two programs.

What’s more, there are lots of different ways to look at this: yes, 45 percent of ACOs failed to generate savings, but at least a majority, 55 percent, did so. And the news was better in the Pioneer Program, where 75 percent generated at least some savings. The reality that only 92 of 333 MSSP ACOs received shared savings payments, representing only 27.6 percent of all of the ACOs in that program, must probably have been greeted with discouragement among senior CMS officials as well. And of course, these lukewarm results will inevitably give ammunition to the many Negative Nancys out there who, wrong-headedly, are determined to believe that the great accountable care experiment will necessarily end in failure (and really, who needs friends like them, anyway??).

But truly honestly, being a determinedly glass-half-full person myself, I would say this: both of these programs are relatively young ones, and everyone involved in them is working through some very big obstacles and challenges. Indeed, just yesterday, I interviewed two senior leaders at a large medical group that joined the MSSP program in January, who noted that they continue to struggle, several months into their participation in that program, with core patient attribution issues and the data issues related to core attribution issues.




One stat holds the essence of the problem with ACOs: "29 percent received bonuses." All the folks starting ACOs were smart and hardworking, and most invested significant $$ to play. A third dropped out after spending millions of their own money. What's wrong with this picture?

There's a saying on Wall Street:
"Bulls make money and Bears make money, but Pigs get slaughtered."

The ACO rules favored CMS so much, without giving the ACOs the tools to make real changes, that the real surprise is any ACOs succeeded at all. And with only a 29% success rate, and an annually resetting target, I wouldn't be surprised to see more ACOs drop out-too much work for too little gain.

ACOs also missed the point that FFS devours $100,000/MD/yr. (that we can measure) in multispecialty groups, not counting unpaid services. This is almost pure waste. The ACOs are able to layer more garbage on top of MCR FFS billing, but not fix the underlying problem: high functioning health care systems are built on primary care, and current US FFS favors big ticket care at the expense of primary care.