CMS data shows ACOs saved Medicare $314M in 2017

stethoscope on money
New data from CMS shows Track 1 ACOs saved $291 million last year. (Getty/Maudib)

New data from released by the Centers for Medicare & Medicaid Services (CMS) on Thursday shows accountable care organizations (ACOs) generated hundreds of millions in savings last year, reigniting the debate around the agency’s proposal to push ACOs into two-sided risk models.

All told, 472 ACOs caring from 9 million Medicare beneficiaries recorded $1.1 billion in gross savings in 2017. After accounting for $780 million in shared savings payments, ACOs in the Medicare Shared Savings Program saved $314 million, according to data released by CMS. 

Track 1 ACOs, which do not bear any financial risk but share in any savings generated, made up the bulk of the savings, accounting for $291 million in net savings. Those ACOs also account for the vast majority of ACOs in the program, covering more than 8 million beneficiaries.


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.

For the National Association of ACOs (NAACOs), those number reinforced the need to give ACOs more time to transition from a one-sided risk model to a two-sided approach.

“These recent results show that ACOs have turned the corner and this evidence dispels confusion about ACO performance," NAACOS President and CEO Clif Gaus said in a statement. "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.”

Gaus used the newly released data to criticize CMS’ proposed rule that would shorten the path to two-sided risk to two years and cut shared savings in half. A NAACOS survey earlier this year showed most Track 1 ACOs would leave the program if asked to take on more risk.

“The double whammy of greater risk for less reward is like putting up a ‘Stop’ sign on the road to value-based care,” he said.

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

CMS Administrator Seema Verma has previously said the program is losing money on Track 1 ACOs. Earlier this week she doubled-down on two-sided risk models following a new report on Next Generation ACOs reduced Medicare spending by $62 million.

Obama’s former health IT lead turned ACO guru Farzad Mostashari, M.D., took to Twitter to say he wasn’t backing off his support for two-sided risk models to “weed out ACO squatters.” But the CEO of Aledade said CMS benchmarks actually underestimate the amount of savings generated by ACOs and the true number could be closer to  $1 billion.

Exactly how the final rule plays out remains to be seen, but the industry continues to draw dividing lines over the push to take on more risk.

Suggested Articles

We need our federal programs and policies to reflect the goal of improving the health of both women and men.

Two lawsuits were filed suing the Trump administration to overturn a new rule that would allow healthcare workers to deny care over religious or conscience…

Policy changes are affecting how investors view the skilled home health market and paving the way for potential strategic acquisitions.