The improved MSSP results—including Track 1 ACOs providing the bulk of the 2017 Medicare savings—could bolster the case for allowing continued upside-only risk, say ACO advocates.


Aug. 31—Medicare’s main group of accountable care organizations (ACOs) delivered big 2017 savings. Will that affect the program’s fate?

The 472 Medicare Shared Savings Program (MSSP) ACOs generated $314 million in net savings to Medicare in 2017 after accounting for bonuses paid to ACOs, according to an analysis of performance data quietly released this week by the Centers for Medicare & Medicaid Services (CMS).

“These recent results show that ACOs have turned the corner and this evidence dispels confusion about ACO performance,” Clif Gaus, president and CEO of the National Association of ACOs (NAACOS), said about NAACOS’s analysis of the raw CMS data. “The hard work of ACOs is paying off—for patients, providers and for the Medicare Trust Fund, and it’s essential we strengthen this program for the future.”

The MSSP ACOs generated gross savings of $1.1 billion—out of $95 billion in Medicare spending—under the CMS methodology for setting financial benchmarks, another analysis by physician advisory group Aledade found.

“That does not count savings that come from lower costs to the taxpayer from Medicare Advantage rates that are keyed off” fee-for-service Medicare, Farzad Mostashari, MD, CEO, of Aledade, wrote on Twitter.

The results were a marked improvement from 2016, when MSSP ACOs provided $652 million in gross savings and a net Medicare loss of $39 million after bonuses were paid.

“I think that the net savings this year—as opposed to a slight loss last year—is a function of more organizations moving to risk (so a few more poor performing ACOs had to pay back a penalty payment), more organizations that have more experience and are actually figuring out how to manage new populations, and some poor performers leaving the program,” said David Muhlestein, PhD, chief research officer for Leavitt Partners.

In 2017, 60 percent of ACOs saved money and 34 percent earned shared savings. That was an increase from 56 percent saving money and 31 percent earning shared savings in 2016, NAACOS found.

The share of ACOs earning shared savings jumped to 51 percent among those that entered the program in 2012, said Clare Pierce-Wrobel, senior director for the Health Care Transformation Task Force. In comparison, only 20 percent of the newest ACOs received bonus payments, Muhlestein said.

“So you can see improvements over time or the longer ACOs are in the program,” Pierce-Wrobel said in an interview.

Other findings of various analyses included:

  • $780 million in shared savings bonuses were paid to ACOs
  • Track 2 and 3 ACOs generated $190 million in savings and received $95 million in bonuses
  • Track 1 ACOs generated $1.5 billion in savings and received $685 million in bonus payments

An analysis by Leavitt Partners found ACOs that were in two-sided risk were just as likely as those in one-sided risk to achieve savings for CMS (60 percent Track 1 versus 59 percent in Tracks 2 and 3), but two-sided ACOs were much more likely to achieve bonus payments, Muhlestein said.

Overhaul Impact

The data—released long before the usual October data release—comes as CMS considers an overhaul of the MSSP program, as specified in an Aug. 17 proposed rule.

“What was surprising was the timing of this data release—considering the open comment period in CMS’s proposed rule to overhaul the program,” Pierce-Wrobel said. “Now that these data are out and public, they seem like a boon to those in favor of maintaining an upside-only track.”

Among various changes, the CMS overhaul would replace Track 1, which allowed six years of upside only risk, with a new model that would require downside risk within two years.

Beyond the narrowed upside option, ACO advocates are worried that the new ACO structure’s BASIC track would reduce shared savings they could garner from 50 percent to 25 percent.

“’Twenty-five percent is not enough,’ is what we have heard so far,” Pierce-Wrobel said about feedback from ACOs about the overhaul. “Your mission can be aligned with the objectives of the program but that [saving rate] is a very hard sell to a CFO.”

Other components of the overhaul that have drawn concerns include those that would limit participation options based on whether the ACO was considered a high- or low-revenue ACO.

“This puts a line in the sand between physician-run and hospital-run ACOs, so we’re looking at whether that kind of design is going to create a level playing field that essentially disincentivizes hospital participation in the program,” Pierce-Wrobel said.

Pierce-Wrobel and other ACO advocates continued to urge CMS to authorize an outside evaluation of the MSSP results, such as the recently conducted independent analysis of Next Generation ACOs.

CMMI View

In comments to reporters this week, the recently appointed director of CMMI, Adam Boehler, caught industry attention when he said he “could be OK” with large ACO departures.

“Our job isn’t to have a lot of ACOs,” Boehler said. “Our job is to improve performance—to drive costs [down] and improve quality. And so there are some people that should be in an ACO and some that shouldn’t.”

Increasing the number of Medicare ACOs was long a leading priority of the Obama administration.

“Given the success of ACOs and the understanding that generating savings and achieving high quality takes time, it is imperative to keep current ACOs in the program so they continue to improve and evolve,” Allison Brennan, vice president of policy at NAACOS, said in response to Boehler’s comments.

In addition, Brennan underscored the need for a “healthy pipeline” of new ACOs to move more providers toward value-based payment, “which is a long-standing bipartisan goal of the administration and Congress, as well as a goal of ACOs and many in the broader healthcare industry.”

“It definitely seems clear that director Boehler has a different perspective on how to operate the program and what those goals would be,” Pierce-Wrobel said.

She noted the proposed rule spelling out the overhaul detailed savings the changes could provide. Those savings were increased not by increasing the number of ACOs but by reduced shared savings to ACOs expected to leave the program in future years.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Tuesday, September 04, 2018