August 24, 2023 - Modern Healthcare
Lauren Berryman
Nearly two-thirds of Medicare Shared Savings Program accountable care organizations earned shared savings last year, the Centers for Medicare and Medicaid Services announced Thursday.
These ACOs saved Medicare $1.8 billion in 2022, 8.4% more than during the previous year, according to CMS. The proportion of Shared Savings Program ACOs that generated cost reductions increased from 58% to 63%.
Related: CMS tries luring providers to revamped Medicare ACOs
Medicare Shared Savings Program ACOs saved more money in 2022 than in all but one year since the initiative debuted in 2012 and have achieved spending reductions for six consecutive years, CMS reported. This ACO model is the agency's largest and has produced the greatest savings.
“The Shared Savings Program is Medicare’s permanent, flagship accountable care program, and we look forward to continually improving and growing the program, expanding the reach of participating ACOs and addressing critical health disparities across the country,” Center for Medicare Director Dr. Meena Seshamani said in a news release.
As in previous years, ACOs dominated by primary care physicians generated more per-member savings than those led by hospitals. Low-revenue ACOs collected $228 per capita in net savings while high-revenue ACOs saved $140 per capita. Low-revenue ACOs comprising at least 75% primary care clinicians reaped $294 per capita in net savings. CMS noted it’s exploring ways to help ACOs boost primary care investments.
Physicians ACO of Ocala, Florida, reported the highest savings rate at 18.2%, or $13.5 million, for its nearly 6,500 members, according to CMS data. Empire ACO of Brooklyn, New York, reported the largest losses at $23.3 million, or 15.3%, for its nearly 6,600 members. Empire ACO is part of the Advanced Management USA network, which provides administrative services to six ACOs in Florida.
Physicians ACO and Advanced Management USA did not respond to interview requests.
Medicare Shared Savings Program ACOs garnered $2.52 billion in performance bonus payments last year compared to $1.96 billion in 2021.
Industry leaders cheered the CMS report. “Every year, the body of data on how ACOs are improving our fragmented health system grows, and this year is no different,” National Association of ACOs President and CEO Clif Gaus said in a news release. “ACOs continue to provide more of what patients want and deserve—affordable, high-quality, coordinated and personalized care.”
Dr. Farzad Mostashari, CEO of Aledade, which helps physicians transition into value-based care, said in a news release that physician practices in the Aledade network have used Medicare shared savings to address workforce challenges, create patient outreach programs and devise new methods of care.
“Allowing primary care to assume accountability for the total cost and quality of care for their patients works. It works for patients who get access to more informed, more engaged, more proactive primary care. It works for practices who are able to maintain their clinical autonomy and thrive financially. And it works for the Medicare program, which is achieving the promise of better care at lower cost,” Mostashari said.
Still, participation in the Medicare Shared Savings Program has plateaued in recent years: At the beginning of 2023, it had 456 participants, down 5.6% from last year, according to CMS data. The agency aims for all Medicare beneficiaries to be covered under ACOs or other alternative payment models by 2030.
Last month, CMS proposed technical updates to the Medicare Shared Savings Program it contends will increase participation by up to 20%. The agency issued proposals such as eliminating penalties for ACOs that do not achieve benchmark savings, adopting a new risk-adjustment model and capping the amount healthcare costs can grow in a given year. The agency is accepting comments on the draft regulation until Sept. 11.