NAACOs says ACOs saved Medicare nearly twice as much as CMS' estimates

A stethoscope and paper money.
Methodological differences have produced wildly different estimates of how much ACOs saved between 2013 and 2015. (Getty Images/utah778)

The Trump administration wants to make big changes to the way Accountable Care Organizations (ACOs) participate in the Medicare Shared Savings Program (MSSP). But that policy shift could be rooted in flawed data, according to a new report from the National Association of ACOs (NAACOs).

The Centers for Medicare & Medicaid Services (CMS) has said MSSP ACOs produced net savings of $954 million between 2013 and 2015. NAACOs, by contrast, says those same organizations saved $1.84 billion—nearly twice that amount.

NAACOs said its estimate is more accurate because it was calculated using a difference-in-difference regression analysis. This methodology compared beneficiary spending in the program to beneficiaries that weren't assigned to an ACO.

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CMS, meanwhile, used an administrative formula. According to the NAACOs report, “this may be an appropriate way to set performance benchmarks,” but “it produces a biased estimate of program savings compared to what may have occurred if the ACO program had not been in place.”

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

The report (PDF), conducted by the consulting firm Dobson | DaVanzo and Associates, says the program also cut spending by 1.1-1.2% per member per year—an average of $10,331 per beneficiary—even though Medicare spending increased 2.9% per capita overall during the 2013-2015 time frame.

The new estimates are comparable, though not identical, to a 2016 study by a team of scientists from Harvard University, NAACOs said. Another recently released study found physician group ACOs saved more money than hospital-integrated ones and one-sided models “may be effective in lowering Medicare spending.”

NAACOs has been fiercely lobbying CMS not to adopt proposed changes to the ACO program that would limit the amount of time ACOs can remain in a one-sided risk model and cut the percentage of shared savings in half. The data added a new talking point in the heated debate over whether CMS should move forward with its proposal

In a blog post published in Health Affairs, Clif Gaus, NAACOs president and CEO, and Robert Mechanic, executive director of the Institute for Accountable Care, argued the report builds on previous data that shows ACOs have generated significant savings for Medicare. 

"Furthermore, the MSSP has created spillover effects in both fee-for-service Medicare and Medicare Advantage that likely result in billions in savings," they wrote. "This underscores the importance of maintaining a robust Medicare ACO program that continues to grow over time."

Benchmarks, on the other hand, do not accurately reflect geographic variation in spending, the increasing burden of illness as beneficiaries age, or national Medicare spending growth, the pair wrote.

RELATED: Most ACOs would flee Medicare program if pushed to take on more risk

The advocacy group agrees that ACOs should take on more risk over time, but the proposed changes to the program would cut out 20% of participating organizations, even by CMS estimates. Although most MSSP ACOs are in a one-sided risk model, CMS Administrator Seema Verma has taken a hardline stance on the approach, arguing that the agency only wants to partner with organizations "that are serious about delivering value."

“We don’t think there’s any point in continuing arrangements where providers are taking waivers from the federal government and actually losing money," she said in a press call earlier this year. 

But NAACOs used the new study to encourage CMS to extend the amount of time it will allow ACOs to remain in these models.

“The analysis should put to rest claims that shared savings-only ACOs do not save Medicare money,” Gaus said in a release.