Latest Medicare ACO Results

By September 9, 2016Commentary

The Medicare accountable care organization program finished its fourth year in 2015 and CMS recently issued results for that year.   (CMS Release)   For 2015 there are only 12 Pioneer ACOs, which share more risk, and 392 participants in the Shared Savings model.  According to CMS, these organizations saved $466 million in 2015, but only 125 saved enough to get a shared savings payment.  And the Pioneer ACOs accounted for $37 million of those savings, but only six of even these advanced organizations saved enough to get a payment.  One Pioneer ACO even had to make a payment to CMS for excessive spending.   Many ACOs have been frustrated by the large costs generated by being a Medicare ACO, compared with the limited financial rewards, and there has been significant churn among participants.  At least based on the quality measures CMS is using, many of the ACOs are improving the quality of care they provide.  All 12 Pioneer ACOs improved quality from 2012 to 2015 by at least 21 percentage points.  And from 2014 to 2015, among shared savings ACOs, there was a 15% average improvement in certain key preventative care quality measures and those ACOs in the program both years showed improvement on 84% of quality measures.

The acting CMS Administrator, Andy Slavitt, said that the ACO initiative has “resulted in better care for over 7.7 million Medicare beneficiaries while also reducing costs”.  Looking at the actual numbers reveals that this is more than a bit of an exaggeration.  Less than a third of the shared savings participants actually lowered spending enough to get a shared savings payment.  And not every ACO improved quality over what is available in the regular FFS program.  So many of the 7.7 million beneficiaries assigned to ACOs didn’t see a benefit by these measures.  On the positive side, it appears that the longer an ACO participates in the program, the better it does in reducing spending and improving on the quality measures.  To really be successful, CMS needs to make some major changes to the ACO program, including allowing actual beneficiary enrollment and creating some beneficiary lock-in.  And the ACO program is a long way from generating results similar to the Medicare Advantage plans, so you wonder why CMS doesn’t just do more to encourage people to enroll in those plans.

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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