Centers for Medicare and Medicaid Services: Medicare and Pioneer ACOs Report Results

The Centers for Medicare and Medicaid Services (CMS) has reported the most recent quality and shared savings results from the Medicare Shared Savings Program Accountable Care Organizations (ACOs) established by the Affordable Care Act, as well as the 20 Pioneer ACOs established by CMS through the Center for Medicare and Medicaid Innovation.  Since passage of the Affordable Care Act, more than 420 Medicare Shared Savings Programs ACOs have been established, serving more than 7.8 million Americans with fee-for-service Medicare as of January 1, 2015.

The Medicare Shared Savings Program ACOs that reported quality measures in 2013 and 2014 improved on 27 of 33 quality measures.  Meanwhile, in their third performance year, Pioneer ACOs showed improvements in 28 of 33 quality measures, and experienced average improvements of 3.6% across all quality measures.

According to CMS, 92 Medicare Shared Savings Program ACOs  earned performance payments of more than $341 million as their share of program savings. An additional 89 ACOs reduced health care costs compared to their benchmark, but did not qualify for shared savings, as they did not meet the minimum savings threshold.  ACOs with more experience in the program were more likely to generate shared savings.  Among 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.

An accompanying fact sheet reports that 11 of the remaining 20 Pioneer ACOs qualified for shared savings payments of $82 million.  4 other Pioneer ACOs reduced their health care costs but did not qualify for shared savings.  The remaining 5 Pioneer ACOs had increased health care costs, with 3 having to pay CMS penalties totaling $9 million for CMS’ losses/increased costs.

These results remain encouraging overall but reinforce that quality improvements and shared savings continue to take significant time and effort to achieve and sustain, and are not uniform or automatic, even when there are organizational infrastructures such as ACOs created to drive forward those improvements and savings.  The increase, rather than decrease, in health care costs experienced by a significant number of the remaining Pioneer ACOs may mean that model will not continue very long, and be transitioned into the Medicare Shared Savings Program under new rules proposed in late 2014, expected to be finalized this year.

This entry was posted in Health Care Reform, Health Care Reform: Accountable Care Organizations. Bookmark the permalink.

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