ACOs Continue to Show Mixed Results in Producing Savings

Most accountable care organizations (ACOs) did not qualify for shared savings in 2014, according to results released late yesterday by CMS. Those with more years in the program are more likely to be eligible for bonuses, which CMS officials shows that experience counts.

But others said the difficulty in achieving shared savings benchmarks means that squeezing out savings while achieving high quality care is hard. The results show that while ACOs help, they are not the only solution to holding down healthcare costs.

CMS figures showed that 97 ACOs accounted for $411 million in total savings in 2014, which includes all savings and losses. These ACOs met the benchmarks for $422 million in shared savings payments, which include a combination of quality standards and savings targets.

“These results show that accountable care organizations as a group are on the path towards transforming how care is provided, “said CMS Acting Administrator Andy Slavitt in a statement.

However, the results showed there were definitely winners and losers; among a select group of early ACOs called Pioneers were a few that experienced losses; these organizations will have to repay CMS a total of $9 million.

The ACO program consists of 2 parts: the Pioneer program, which started out with 32 participants, was designed for larger systems that had some experience with alternate payment models; and the Medicare Shared Savings Program (MSSP), which has 333 participants. The Pioneers are down to 20 participants.

CMS wants to see the ACO program expand and has set goals for 30% of Medicare reimbursements to be tied to value-based payment models in 2016, with that rate rising to 50% by 2018.

Savings Results. Pioneers as a group generated savings of $120 million. Of these, 15 achieved savings but only 11 qualified for bonuses, which totaled $82 million.

In the MSSP group, 92 held spending $806 million below targets, which earned them bonus payments of more than $341 million. Another 89 ACO reduced costs but felt short of the target needed for a bonus payment. Those with more years in the program were more likely to earn a bonus payment.

CMS pointed out that “total model savings” has increased over time, from $2.7 million per ACO in the first year of the program to $4.2 million in Year 2 to $6 million in Year 3.

Quality of Care Scores. In its statement, CMS said that the mean quality score among the Pioneers increased to 87.2 in the third year, up from 85.2 in the second year. While an improvement, the jump was not as large as the one from Year 1, when the quality score was only 71.8.

Areas of greatest improvement were scores for medication reconciliation, screening for clinical depression and follow-up, and qualification for electronic health record incentive payment.

In the MSSP group, ACOs that reported scores in both 2013 and 2014 improved on 27 of 33 quality measures.

How to Learn More. The ACO and Emerging Healthcare Delivery Coalition is a major initiative of The American Journal of Managed Care, which brings together stakeholders from across the healthcare spectrum to share ideas on how to navigate the new payment models and measurement criteria that are required under CMS’ initiatives.

Participation includes 2 live meetings a year with nationally known speakers, as well as opportunities to take part in web-based sessions and gain access to other materials. The next meeting will be October 15-16, 2015, in Palm Harbor, Florida. For information, see http://www.ajmc.com/acocoalition.