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Top MSSP ACOs Miss the Mark on Shared Savings

May 2, 2018 BY Alanna Moriarty

According to a new Avalere study, Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) generated savings significantly lower than estimates made by the Congressional Budget Office (CBO) in 2010 when the program first launched. 

The MSSP was announced by the Centers for Medicare and Medicaid Services (CMS) in 2010 as an incentive for healthcare providers to work together to improve patient care coordination. Under the Shared Savings Program, both healthcare providers and suppliers can form an ACO. In an ACO, participating organizations share responsibility for the quality, cost, and outcome of care provided to an assigned Medicare fee-for-service population.

Top 10 MSSP ACOs by Generated Savings
ACO Name Patient Population Generated Savings
Palm Beach Accountable Care Organization (FL) 51,150 $62,751,855
Advocate Physician Partners Accountable Care (IN) 139,617 $60,680,999
Hackensack Alliance ACO (NJ) 29,546 $50,511,463
USMM Accountable Care Partners (MI) 17,842 $44,479,905
Cleveland Clinic Medicare ACO (OH) 71,113 $42,204,925
AMITA Health Accountable Care Organization (IL) 36,771 $42,011,535
Memorial Hermann Accountable Care Organization (TX) 51,337 $31,114,764
Orange Accountable Care of South Florida (FL) 17,747 $28,598,190
Balance ACO 6,051 $28,231,243
BHS Health System [Closed] (TX) 32,672 $27,934,433

Fig 1 Data from Definitive Healthcare based on CMS reporting of MSSP ACO Gross Generated Savings.

Participating ACOs can choose from four different MSSP “tracks”:

  1. Track 1: ACOs do not take on risk for shared losses if they do not lower Medicare expenditures
  2. Track 1+: ACOs assume limited risk for shared losses
  3. Track 2: ACOs may share in savings (greater than those in Track 1) or repay Medicare losses depending on individual performance
  4. Track 3: May share in generated savings (greatest of any track) or repay losses to Medicare depending on performance

The majority of MSSP ACOs choose Track 1, which does not require participants to repay Medicare for spending above the target budget. From 2012 to 2018, the number of ACOs participating in the shared savings program grew from 27 to 561, exacerbating the issue of overspending without repayment to Medicare. Experts believe that rather than decreasing healthcare spending, as the MSSP was meant to, the program is actually increasing healthcare-related spending.

Avalere's study found that actual ACO net savings fell more than $2 billion short of CBO projections between 2013 and 2016. While MSSP ACOs were projected to decrease federal budget expenditures by $1.7 billion, the MSSP actually increased federal spending by more than $380 million from 2013 to 2016--a difference of over $2 billion. Though overall savings have not met initial expectations, individual ACO performance appears to be improving over time. MSSP ACOs in their fourth performance year showed net savings totaling $152 million, suggesting that participating ACOs require experience in order to produce meaningful savings.

Top ACOs by Patient Population
ACO Name Patient Population ACO Type
TMA PracticeEdge (TX) 5,000,000 Commercial ACO
Texas Health Resources ACO (TX) 1,600,000 Commercial ACO
Aetna - Childrens Hospital of Philadelphia (CHOP) ACO (PA) 1,400,000 Commercial ACO
Delaware Valley ACO (PA) 1,400,000 Commercial ACO
Steward Integrated Care Network (MA) 1,000,000 Medicare Next Generation ACO
Carilion Clinic ACO (VA) 1,000,000 Commercial ACO
Heritage Medical Group ACO (PA) 700,000 Commercial ACO
Atrius Health Pioneer ACO [Closed - Left Pioneer Program] (MA) 700,000 Medicare Pioneer ACO
Healthcare Partners ACO (CA) 675,000 Commercial ACO
Riverside Health System ACO (VA) 500,000 Commercial ACO

Fig 2 Data from Definitive Healthcare based on CMS reporting.

According to Definitive Healthcare data, the top 10 MSSP ACOs generated an average of $41.8 million dollars last year, and a total combined savings of $418.5 million.

For more information on the Top MSSP ACOs, download our Definitive List or visit our blog.

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