Most Medicare shared savings ACOs fell short of payments in 2014

Out of the 333 ACOs in the shared savings program, 92 of them reduced spending by a combined $806 million.
By Henry Powderly
09:22 AM

Despite the many Medicare shared savings ACOs that cut enough of their spending in 2014 to merit financial incentives in 2014, the lion's share of them fell below the payment threshold, the Centers for Medicare and Medicaid Services announced Tuesday.

According to CMS, out of the 333 ACOs in the shared savings program, 92 of them reduced spending by a combined $806 million, resulting in more than $341 million in payouts among them. That represented an improvement compared to 2013, when 538 MSSP ACOs earned $315 million in shared savings.

Another 89 ACOs cut healthcare costs in 2014, but not enough to qualify for shared savings payments, CMS said.

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ACOs in the first year of the model can share in savings they generate, but it is not until Track 2 where they take on the risk of possibly having to pay back Medicare if they spend more than they are benchmarked. However, according to CMS, no ACO in Track 2 owed CMS money in 2014.

CMS said ACOs that have been in the program the longest performed better. Of the ACOs that entered the program in 2012, 37 percent generated shared savings compared to 27 percent of those that entered in 2013 and 19 percent of those that entered in 2014.

Critics of the shared savings model say the potential to generate savings is mixed, and with the bulk of ACOs in the program failing to earn incentives those concerns are given more weight. But CMS said the program is meeting another major goal of the innovation model: quality is improving.

According to CMS, ACOs that reported in both 2013 and 2014 improved in 27 of the 33 quality measures.

"These results show that accountable care organizations as a group are on the path towards transforming how care is provided," said CMS Acting Administrator Andy Slavitt in a statement. "Many of these ACOs are demonstrating that they can deliver a higher level of coordinated care that leads to healthier people and smarter spending."

CMS on Tuesday also announced results for its Pioneer ACO model, a risk-sharing program that includes more experienced health systems.

Among those ACOs, 15 out of the 20 participants generated a total of $120 million in savings, a 24 percent jump compared to performance in 2013. CMS said 11 of those generated enough savings to earn a total of $82 million in shared savings payments.

However, five of those generated losses above the threshold and will pay CMS a combined $9 million to cover those losses.

Twitter: @HenryPowderly