Medicare Shared Savings ACOs saved $1 billion over 3 years, report says

Credit: Matthew Bisanz.

Medicare Shared Savings Program ACOs have reduced spending by nearly $1 billion over the first three years of the program, according to a report released this month by the Office of the Inspector General, Department of Health and Human Services.

In the first three years, 82 percent of the 428 Accountable Care Organizations participating in the Medicare Shared Savings Program improved their performance on quality measures.

A small subset showed substantial reductions while improving quality of care, the report said.

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These high performing ACOS maintained a high use of primary care services, even when beneficiaries tended to be older with more risk factors, and reduced spending by an average of $673 per beneficiary.

The results of the report show promise for one of the largest alternative payment models in Medicare and in helping to reduce Medicare spending which is expected to grow by $1.4 trillion by 2027.

Each ACO is accountable for the total cost of care of beneficiaries, even if the care is provided outside of the accountable care organization. They are required to report on 33 quality measures that determine the amount of cost savings it receives.

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ACOs in Track 1 may get shared savings payments of up to 50 percent of the cost savings.

Those in Track 2 get up to 60 percent, but also share in the risk. Under Track 2, if spending for the year exceeds the benchmark, the ACO may be responsible for up to 60 percent of the losses.

During the first three years, only five ACOs took part in Track 2.

A third of ACOs earned $1.3 billion shared savings payments. On average, each got about $4.8 million for every year they earned the savings. The money was then spent to update electronic health records and other efforts for care improvement, the report said.

Those that received payments on average had higher benchmarks than those that did not.

In 2015, the average benchmark for ACOs that received payments was $11,748 per beneficiary, compared to $10,284 for ACOs that did not receive payments.

ACOs performed better than 90 percent of all fee-for-service providers in terms of low hospital readmissions.

High performing ACOs had the largest spending reductions in hospital inpatient care compared to other services. But they had higher hospital admission rates, the report said.

ACOS also performed better than 80 percent of fee-for-service providers on three other measures: screenings for future fall risk, primary care physicians qualifying for EHR payment and depression screenings and follow-up.

Other improvements were for fall risk, flu vaccines and mass body index screening and follow-up.

ACOs declined on measures related to patient experience, the largest being the percent of beneficiaries who had a blood pressure screening getting a follow-up.

The report found that ACO performance improved over time.

ACOs in general also reduced spending per beneficiary for skilled nursing care.

The OIG said it is reviewing the extent to which ACOs use health information technology to meet their care coordination goals.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com