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Understanding The Latest ACO “Savings”: Curb Your Enthusiasm And Sharpen Your Pencils—Part 1

Understanding The Latest ACO “Savings”: Curb Your Enthusiasm And Sharpen Your Pencils—Part 1

November 12, 2020J. Michael McWilliams & Alice ChenNo CommentsHealth AffairsCommercial Payer Contracting,Risk Management,Risk Stratification,Social Determinants of Health (SDOH),Cost Containment/Reduction,Hosptial Readmissions,Medicare ACOs/MSSP,Bundled Payments,Medicaid ACOs,Alternative payment models (APMs),Direct Contracting,Covid-19 / Coronavirus

In a recent post, the administrator of the Centers for Medicare and Medicaid Services (CMS) reported that the Medicare Shared Savings Program (MSSP) generated $2.6 billion in gross savings in 2019 and $1.2 billion in net savings after accounting for shared-savings payments to participating accountable care organizations (ACOs). Achieving this level of savings would constitute remarkable progress in a short time. Relative to CMS’s own estimates, total net savings rose by $876 million over 2017 levels. Moreover, compared to savings estimated in prior evaluations based on counterfactual spending instead of benchmarks, the 2019 reported net savings is more than three times the cumulative net savings over the program’s first three full years of operation ($358 million) and more than eight times the net savings produced in 2015 ($145 million). The surge in programwide savings vastly outpaced participation, as the number of participating ACOs increased by only 21 percent from 2015 to 2019.

Based on the administrator’s interpretation of the data, it would appear that the MSSP is now circling the bases after stumbling out of the batter’s box. What changed? Ostensibly, the recent overhaul of the program, “Pathways to Success,” and specifically, the increased downside financial risk imposed on ACOs under Pathways.

Full Article

: MACRA, pathways, Pathways to Success

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Understanding The Latest ACO “Savings”: Curb Your Enthusiasm And Sharpen Your Pencils—Part 1
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