New CMS Data on ACOs: Maybe Not a High-Speed Train, But a Train Nonetheless | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

New CMS Data on ACOs: Maybe Not a High-Speed Train, But a Train Nonetheless

October 17, 2017
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CMS’s release last week of data from the Pioneer and Next Gen ACO programs revealed genuine progress being made among participating ACOs

The Debbie Downers in U.S. healthcare would like nothing more than to declare the premature death of the accountable care organization (ACO) phenomenon. Depending whom one speaks to, ACOs are either too aggressive and ambitious in their aspirations and requirements, or not aggressive and ambitious enough; they are either too rigidly architected to succeed, or not built rigorously enough. And the ACO movement is either moving too fast for its leaders to absorb learnings, or moving far too slowly to make any difference in broadly improving patient outcomes and bend the healthcare cost curve in this country.

But the data unveiled on October 12 by the Centers for Medicare and Medicaid Services (CMS) showed real progress in a number of areas. As Managing Editor Rajiv Leventhal noted in his Oct. 16 article, the results reveled that “61 percent of program participants were able to earn shared savings last year. The federal ACO 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,” Leventhal noted.

“The 2016 Next Gen ACO data,” he continued, “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.”

The bottom line? Eleven of the 18 Next Gen ACOs last year earned shared savings, and those 11 were rewarded with $58 million in bonus money (while those that lost money paid $20 million back); all 18 Next Gen ACOs scored 100 percent on quality across 33 measures; and six Pioneer ACOs last year generated shared savings, while the remaining two, while not generating shared savings, also did not require those organizations to pay CMS back, either.

Now, of course, all of this data has to be considered in context, and that context involves limited numbers—18 Next Gen ACOs, and only eight Pioneer ACOs; data on the 480 MSSP (Medicare Shared Savings Program) ACOs was not released publicly last week. So that is important.  Further, any data encompassing even all of the Medicare ACOs still would involve just over 500 ACO organizations. And of course, no private ACO data was included.

All that having been said, the leaders of the ACOs in both the Pioneer and Next Gen programs are showing solid results, and are learning from their efforts to date. With regard to that,  the Charlotte, N.C.-based Premier Inc. noted in a statement following the CMS release of results, 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 [program year] 2016, 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,” the statement said.

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.”

In other words, things are moving forward, but adjustments need to be made in order to make all these programs work optimally.

Glass half-full?

Meanwhile, the CMS announcement came just a week after the results of a nationwide survey of ACO executives was published (Oct. 6) in the Health Affairs Blog. “The 2017 ACO Survey: What Do Current Trends Tell Us About The Future of Accountable Care?” was authored by Kate de Lisle, Teresa Litton, Allison Brennan, and David Muhlestein, and encompassed the perceptions of 240 ACO executives nationwide, representing Medicare, commercial and Medicaid.