Seema Verma: 2019 Medicare Shared Savings Program ACO Performance: Lower Costs and Promising Results Under ‘Pathways to Success’

“… CMS’ Medicare Shared Savings Program is our largest value-based payment program in fee-for-service Medicare for ‘Accountable Care Organizations’ or ACOs. ACOs are groups of health care providers that voluntarily agree to be held accountable for the quality, cost, and experience of care for a population of fee-for-service Medicare beneficiaries.”

“After six years of operating the Medicare Shared Savings Program, in December 2018 the Trump Administration redesigned the program, issuing the ‘Pathways to Success’ final rule. The rule established new participation options and incentives to put ACOs on a quicker path to taking on real risk. The new participation options adopted under Pathways to Success require accountability for spending increases, generally after two years for new ACOs, and close evaluation of the quality of care provided. They also provide an option for new ‘low-revenue’ ACOs, which are generally run by physician practices rather than hospitals, to elect an additional year before taking on ‘downside’ risk for cost increases, since data showed that physician-led ACOs performed better than hospital-led ACOs.”

“Under the Pathways to Success policies, there have been two application cycles, with ACOs joining or entering new agreement periods on July 1, 2019, and January 1, 2020. As a result of these two application cycles, the number of ACOs taking on downside financial risk has nearly doubled.”2019 Medicare Shared Savings Program Results

“Today, I am excited to release performance results for the Shared Savings Program for the 2019 performance year. The results include the first six months of performance for ACOs that joined one of the new participation options under the Pathways to Success policies in July 2019, as well as performance for ACOs that remained in one of the existing participation options or “legacy” tracks. Currently, over 11.2 million fee-for-service Medicare beneficiaries are served by health care providers in ACOs.”Lower Costs Achieved

“In 2019, 541 ACOs in the Medicare Shared Savings Program generated $1.19 billion in total net savings to Medicare, the largest annual savings for the program to date. This is also the third year in a row that the program has achieved net program savings. Consistent with prior years, ACOs with shared savings continued to reduce post-acute care spending, along with hospitalizations and emergency department visits…” Read the full article here.

Source: 2019 Medicare Shared Savings Program ACO Performance: Lower Costs And Promising Results Under ‘Pathways To Success’ – By Seema Verma, September 14, 2020. Health Affairs Blog.

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