CMS: Just one in four shared-savings ACOs earned bonus pay

232 providers and hospitals officially join Medicare's bundled-pay initiatives

CMS on Thursday released performance data on three health care delivery reform initiatives, and the agency says the findings suggest that Medicare's delivery system reforms are "off to a strong start."

The agency also said that 232 organizations have entered into participation agreements for its bundled-payment initiatives.

(See the Advisory Board's take on the new data.)

ACO progress: Just 29 MSSP participants earned bonuses in year one

As part of its progress report on Medicare accountable care efforts, CMS released interim financial data from the first year of the Medicare Shared Savings Program (MSSP)—an ACO initiative that launched in April 2012—and in-depth savings analysis for Pioneer ACOs.

The MSSP data revealed that 54 of the 114 ACOs included in the analysis had lower than projected expenditures in their first 12 months.

However, just 29 of those ACOs saved enough to generate bonus payments, which totaled $126 million. In addition, the ACOs generated $128 million in net savings for Medicare's trust fund.

Final year-one performance data for MSSP participants will be released later in 2014.

An independent preliminary assessment of the Pioneer ACO Program shows that the 23 high-profile ACOs generated $147 million in total savings in their first year while maintaining high-quality care. This savings estimate far exceeded that of an early analysis of the program released last year.

How one Pioneer ACO saved money—and why another one didn't

The agency also released data from the Physician Group Practice Demonstration, which is widely considered a precursor to the agency's two ACO programs. It found that seven out of 10 doctor practices participating in the program met benchmarks for improving quality and cost efficiency, generating $108 million in overall savings over five years.

"These innovative programs are showing encouraging initial results, while providing valuable lessons as we strive to improve our nation's health care delivery system," says HHS Secretary Kathleen Sebelius, adding, "Today's findings demonstrate that organizations of various sizes and structures across the country are working with their physicians and engaging with patients to better coordinate and deliver high quality care while reducing expenditure growth."

Number of bundled-payment participants falls

CMS on Thursday also announced that 232 acute-care hospitals, nursing homes, physician practices, home health agencies, and long-term care hospitals have formally joined its Bundled Payments for Care Initiative.

Medicare's bundled payment initiatives seek to test whether paying lump sums for episodes of care will lower health care costs without harming care. More than 450 provider organizations initially were named to the program last year for a trial period, which didn't include any financial risk. However, several hundred organizations elected not to proceed with the full-fledged program this year (Evans, Modern Healthcare, 1/30 [subscription required]; CMS blog, 1/30; HHS release, 1/30).

The Advisory Board's take

Rob Lazerow, Health Care Advisory Board

The initial results from the Medicare Shared Savings Program reinforce a key reality for providers: building an effective population health enterprise is a complex and time-intensive process.

New ACOs may have to tackle a number of foundational steps before demonstrating savings or earning bonuses, such as engaging physician partners, improving referral pathways, deploying IT and analytic systems, and developing new care management models.

But overall, I’m encouraged to see that nearly 50% of the 2012 ACOs beat their spending benchmarks; to me, this is a more important early result than the number of ACOs that received bonuses. Hitting that spending benchmark signals the feasibility of population health, while missing the bonus payment may just point to how the MSSP program was designed. CMS can continue to tweak the shared savings model to reward providers for successfully reducing cost and improving quality.

My team has been tracking payment reforms at our blog (and sharing updates during our current meeting series), and we look forward to CMS releasing more granular data on 2012 ACO performance so we can assess the characteristics of more and less successful ACOs.

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Daily roundup: Jan. 30, 2014

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