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Medicare ACO Savings, Quality of Care Improve in Year Two, CMS Reports

September 17, 2014
by Rajiv Leventhal
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Accountable care organizations (ACOs) in the Pioneer ACO model and Medicare Shared Savings Program (MSSP) have generated more than $372 million in total program savings for Medicare ACOs, the Centers for Medicare & Medicaid Services (CMS) have announced.

At the same time, ACOs qualified for shared savings payments of $445 million. The news comes from preliminary quality and financial results from the second year of performance for 23 Pioneer ACOs, and final results from the first year of performance for 220 MSSP ACOs, CMS reports. Since passage of the Affordable Care Act, more than 360 Medicare ACOs have been established in 47 states, serving over 5.6 million Americans with Medicare.

Additional year two results from the Pioneer ACOs include:

  • An estimated total model savings of over $96 million and at the same time qualified for shared savings payments of $68 million
  • Eleven Pioneer ACOs earned shared savings, 3 generated shared losses, and 3 elected to defer reconciliation until after the completion of performance year three.
  • The organizations showed improvements in 28 of the 33 quality measures and experienced average improvements of 14.8 percent across all quality measures.
  • The mean quality score among Pioneer ACOs increased by 19 percent, from 71.8 percent in 2012 to 85.2 percent in 2013.

Additional year one results from MSSP participants include:

  • 53 Shared Savings Program ACOs held spending $652 million below their targets and earned performance payments of more than $300 million as their share of program savings
  • An additional 52 ACOs reduced health costs compared to their benchmark, but did not qualify for shared savings, as they did not meet the minimum savings threshold.     
  • Shared Savings Program ACOs improved on 30 of 33 quality measures

“We all have a stake in improving the quality of care we receive, while spending our dollars more wisely,” Health and Human Services (HHS) Secretary Sylvia M. Burwell said in a statement.  “It’s good for businesses, for our middle class, and for our country's global competitiveness.  That’s why at HHS we are committed to partnering across sectors to make progress."

Of the Pioneer ACO savings, the Phoenix, Ariz.-based Banner Health Network was the top performer with $15 million, making up 16 percent of the total, according to a Banner announcement. "Highly engaged provider partners, information technology tools and an organizational commitment to value-based care were key elements of our success," Chuck Lehn, Banner Health Network CEO said in a statement. "Supporting beneficiaries when they were most at risk and in need of medical advocacy— after a new diagnosis, following hospital discharge, or as a result of multiple emergency department visits, for example— has also been an important strategy in this program."

Despite the seemingly encouraging news, the Pioneer ACO program hasn’t paid off for all of its provider participants—10 of which have exited since the program began. The most recent to do so was the San Diego-based Sharp Healthcare. In July 2013, nine ACOs out of the original 32 withdrew, including two others in California. Many transitioned to the less intense Medicare Shared Savings program, while some left government initiatives altogether. 

Additionally, in response to the news delivered by CMS, the Charlotte, N.C.-based Premier healthcare alliance releases a statement commending the agency and participating care providers on initial MSSP and Pioneer ACO successes. However, providers participating in Premier’s PACT Population Health ACO Collaborative, believe now is the time to reevaluate certain MSSP polices to further strengthen the program and ensure continuous growth and success, according to Premier.

To maintain a robust program, CMS must make fundamental changes to the program, Premier says, including: minimizing application, program and underlying payment requirements to the extent possible for prospective applicants; not require downside risk in the second contract and should develop additional tracks for those that do for existing participants; increase the percentage that can be earned in shared savings for all participants; allow beneficiaries to opt into the program through an attestation process, along with the existing attribution process, to stabilize at least a portion of the population; change its risk adjustment policy to either allow a positive adjustment, or remove the negative adjustment; and invest additional resources in data operations to help providers identify gaps in care and coordination, and improve beneficiary outcomes.

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