ACOs generated $4.1B in gross savings in 2020, nearly double 2019 amount

Medicare spending costs money
Accountable care organizations generated nearly $2 billion in net savings for Medicare after taking out shared savings. (Getty/zimmytws)

Accountable care organizations saved Medicare $4.1 billion in 2020 and nearly $2 billion after taking out shared savings, according to new federal data.

The data, announced Wednesday by the National Association for Accountable Care Organizations (NAACOS), are an improvement over the $2.6 billion in shared savings they generated in 2019 and $1.9 billion after taking out the shared savings.

“Today’s data underscores the need for policymakers to do all they can to grow the ACO model and extend the program’s benefits to more patients,” said NAACOS President and CEO Clif Gaus in a statement. “We currently have the fewest number of Shared Savings Program ACOs since 2017. That trend must be reversed, given continued debate about ways to improve our health system.”

The 513 ACOs that participate in the Medicare Shared Savings Program (MSSP) generated $390 in gross savings per beneficiary and, 345 out of the 513 got shared savings.

ACOs agree to take on financial risk and get such savings if they meet certain quality and spending benchmarks but must repay Medicare if they don’t reach such thresholds.

CMS’ data showed that 97% of ACOs that take on financial risk produced gross savings, and 88% earned shared savings.

The data showed ACOs had an average quality score of nearly 98%, and 60 ACOs got a perfect score, NAACOS said.

“During the pandemic-stricken year of 2020, ACOs were valuable assets in managing patient care,” the association said in a release. “Given their accountability to long-term patient care and outcomes, ACOs were proactive in their outreach to high-risk patients to keep them healthy, quickly established telehealth and remote monitoring capabilities to continue to provide care.”

The new data come as ACOs are working to reverse a slide in participation in MSSP over the past several years.

The 513 ACOs participating in 2020 is down from a high of 561 in 2018 but is up from the 487 that were in the program in 2019. NAACOS pegs the slide on Trump-era regulations that called on ACOs to take on financial risk earlier in the program.

New legislation introduced in the House aims to stem the slide by raising the amount of shared savings an ACO can achieve through MSSP and introducing several other reforms.