The Centers for Medicare & Medicaid Services (CMS) has released results from year one of its Next Generation ACO model, revealing that 61 percent of program participants were able to earn shared savings last year.
The federal ACO (accountable care organization) data from CMS, released without much elaboration, as it often was in the previous administration, disclosed the results of how the 18 ACOs in CMS’ Next Gen ACO model performed in 2016. As CMS explained on its website when it launched this ACO model in January 2016, “Building up on experience from the Pioneer ACO Model and Medicare Shared Savings Program (Shared Savings Program), the Next Generation ACO Model offers a new opportunity in accountable care—one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.”
Next Generation Model participants have the opportunity to take on higher levels of financial risk—up to 100 percent risk—than ACOs in other current initiatives. While they are at greater financial risk, they also have a greater opportunity to share in more of the model’s savings through better care coordination and care management, CMS has stated. The two-sided risk model announced 21 participants when it was unveiled last year, most of which have experience in MSSP or the Pioneer Model. But three organizations since dropped out, leaving the total of Next Gen ACO participants at 18.
The 2016 Next Gen ACO data revealed that 11 of 18 participants were able to earn shared savings, while the remaining seven ACOs generated losses outside a minimum loss rate and thus owed shared losses. However, in sum, adding up the 11 ACOs which were able to generate savings ($71 million) and subtracting from the seven ACOs which owed losses ($23 million), the net of all gross savings and losses is about $48.3 million in savings, per the CMS data. And, in aggregate, those ACOs which generated shared savings were rewarded with $58 million in bonus money, while those participants that lost money paid $20 million back in total.
As such, these results should be considered a financial win for Medicare, considering the risk that participants in this ACO model take on. What’s more, all 18 ACOs in this model scored 100 percent on quality across 33 measures they were graded on.
CMS also made public the results of its Pioneer ACO model, which began with 32 ACOs in 2012, but dropped to eight in the model’s final year after the majority of the organizations dropped out. In 2016, all eight ACOs in the Pioneer model generated savings, six of which earned enough savings outside a minimum savings rate to earn shared savings. The remaining two ACOs in this model did not generate shared savings in 2016, but do not owe losses to CMS either.
In sum, these six ACOs earned more than $37 million in shared savings last year. Compared to 2015, Pioneer ACOs garnered similar financial results; total shared savings of over $37 million were generated in 2015 as well. From a quality perspective, ACOs in the Pioneer model last year ranged from 88.9 percent on the low end to 95.8 percent on the high end.
One of the ACOs in the Pioneer program that has been in this model since its inception is Newton, Mass.-based Atrius Health. Officials from this ACO already have touted its results from 2016, noting that it saved CMS $10.4 million. What’s more, Atrius Health’s practices, including Medicare beneficiaries who received most of their primary care at Dedham Medical Associates, Granite Medical Group, or Harvard Vanguard Medical Associates, achieved the highest overall quality scores among Pioneer ACOs. For the over 25,000 Medicare beneficiaries served by Atrius Health clinicians participating in the Pioneer ACO model in 2016, Atrius Health saved Medicare $10.4 million compared to its target, returning $6.8 million in savings to the organization. Atrius Health’s cost of care is the lowest among Massachusetts Pioneer ACOs, according to its officials.
As of Oct. 16, CMS has not published any information regarding 2016 data for its MSSP ACO model. In 2016, MSSP ACOs generated total savings of $429 million, though just 119 of the 392 organizations (30 percent) earned shared savings by holding spending far enough below their financial benchmarks and meeting quality standards.
In comments released on 2016 Next Gen ACO and Pioneer ACO model results, the Charlotte, N.C.-based Premier Inc. noted that it “commends the continued successes of leading healthcare providers participating in the Next Generation ACO and Pioneer programs for their progress in improving the health of a Medicare population, reducing healthcare costs, and leading the change from a volume-based, sickness-focused model to a value-based, wellness-focused health system. These organizations have achieved a savings to Medicare of nearly $149 million across both programs in PY16 and hundreds of millions of dollars in just five years. These results demonstrate that value-based care and payment can successfully lead to better care and improved health and outcomes at a lower cost—when the conditions are right.”
Joe Damore, Premier’s vice president of population health management, also said in the statement that “The results also prove that success in advanced, two-sided risk models is challenging to achieve on a consistent basis due to complex variables and antiquated policies. Part of this is the result of the continuation of public policies that impede success, such as the lack of waivers from antiquated fee-for-service rules, barriers to helping beneficiaries choose best settings for post-acute and other care, incomplete access to complete patient claims information for coordinated care management, limits to beneficiary engagement services such as waived co-pays or meal/transportation vouchers, and the complexity and incompatibility of various federal programs with one another and private payer contracts. These issues urgently need to be addressed and resolved with provider input in order to ensure continued success and further savings for the Medicare program, particularly as more providers look to two-sided risk models in order to capture incentive payments, as promised in the MACRA Quality Payment Program (QPP).”
There has been some positive research momentum on ACOs of late. An August analysis from the U.S. Department of Health and Human Services’ (HHS) Office of the Inspector General found that CMS ACOs participating in Medicare Shared Savings Program reduced spending by nearly $1 billion in the first three years of the program. In its analysis, OIG found that ACOs that were in the program longer were more likely to reduce spending and by greater amounts.
What’s more, a recent Health Affairs analysis found that nearly 90 percent of survey respondents reported that they had at least one upside-only shared savings contracts, 50 percent had at least one active contract that included downside risk of either shared savings/shared losses (38 percent), or capitation (12 percent). And, 47 percent of those surveyed indicated that they were considering participating in, or already have, firm plans to participate in at-risk arrangements, with 47 percent pursuing shared savings/shared losses, and 38 percent pursuing capitation.