ACOs saved Medicare $2.7B to date, outpacing CMS estimates

Hospitals cost
NAACOS says ACOs have saved Medicare $1.1 billion more than CMS estimates, which rely on benchmarks to calculate savings. (Getty/ronstik)

Accountable care organizations in the Medicare Shared Savings Program (MSSP) have saved Medicare $2.7 billion to date, including $859 million in 2016, according to a new analysis from the National Association of ACOs (NAACOS).

The latest financial data outpaces calculations by the Centers for Medicare & Medicaid Services (CMS) which says ACOs saved $1.6 billion between 2013 and 2016. Factoring in bonuses paid to 561 ACOs, the program netted Medicare than $660 million, according to NAACOS, well above the $384 million loss calculated by the agency.

The report (PDF), released by NAACOS on Wednesday, was independently conducted by Dobson | DaVanzo & Associates. It adds more support to the organization’s push to give ACOs time to take on additional risk and share in 50% of savings.

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2019 Drug Pricing and Reimbursement Stakeholder Summit

Given federal and state pricing requirements arising, press releases from industry leading pharma companies, and the new Drug Transparency Act, it is important to stay ahead of news headlines and anticipated requirements in order to hit company profit targets, maintain value to patients and promote strong, multi-beneficial relationships with manufacturers, providers, payers, and all other stakeholders within the pricing landscape. This conference will provide a platform to encourage a dialogue among such stakeholders in the pricing and reimbursement space so that they can receive a current state of the union regarding regulatory changes while providing actionable insights in anticipation of the future.

RELATED: CMS' ACO proposal resurfaces discord over pace of risk-based models

“These results are the latest data point in a growing body of evidence unequivocally proving ACOs’ value,” NAACOS President and CEO Clif Gaus, Sc.D., said in a statement. “ACOs are saving American taxpayers hundreds of millions of dollars at a time when it’s most needed.”

Earlier this year, CMS proposed changes to MSSP that would shorten the glide path for ACOs to take on more risk and cut shared savings down to 25%. The final rule is currently under review by the Office of Management and Budget (OMB). Experts have argued over how fast ACOs should be forced to take on additional risk, but many provider groups have come out against shared savings cuts.

RELATED: CMS data shows ACOs saved Medicare $314M in 2017

The primary reason for the discrepancy between NAACOS’ analysis and federal estimates is that CMS bases performance on the ability for ACOs to meet predetermined benchmarks and spending targets. NACCOS independent analysis uses a difference-in-difference regression analysis that compares savings attributed to ACO interventions.

The analysis adds to a September report issued by NAACOS that found ACOs saved Medicare $1.84 billion through 2015, nearly double CMS’ estimates.

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