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September 12, 2018

Are MSSP ACOs hitting target savings? CMS says no, but a new report says yes.

Daily Briefing

    CMS plans to push accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) to take on more risk to generate greater savings—but the National Association of ACOs is pushing back with a new report that suggests MSSP ACOs are generating more savings than CMS data show.

    Slide deck: Everything you need to know about the proposed MSSP overhaul

    About MSSP

    MSSP encourages ACOs to cut health care costs and improve care coordination by enabling participating ACOs to receive bonus payments if they maintain high-quality care while decreasing Medicare spending compared with their individual benchmarks. The program currently offers three participation tracks that allow ACOs to take on varying amounts of risk.

    Currently, there are 561 ACOs participating in MSSP. Eighty-two percent are in Track 1 of the program, which is the only MSSP track that does not require providers to take on two-sided, or "upside" and "downside," risk. Under MSSP, ACOs can stay in the upside-only risk track for up to six years.

    Some observers have claimed that ACOs under MSSP did not meet the Congressional Budget Office's projected savings target for the program and instead have increased federal government spending from 2012-2016 by $384 million. Separately, CMS Administrator Seema Verma earlier this year said MSSP ACOs that have not yet taken on "downside" risk "are actually increasing Medicare spending."

    As such, CMS last month released a proposed rule that would overhaul MSSP and accelerate the pathway for ACOs to transition to two-sided risk models. The agency projected the changes would save $2.24 billion over ten years if the proposed rule is finalized.

    Report suggests MSSP ACOs are saving more than CMS says

    But a report released Tuesday by the National Association of ACOs suggests ACOs actually have saved more than CMS' data show. The report, which was conducted by Dobson DaVanzo & Associates, compared spending on Medicare beneficiaries in ACOs to spending on beneficiaries who are not in ACOs. This methodology differs from the one used by CMS, which relies on benchmarks to compare and calculate ACO savings.

    The report found that MSSP ACOs generated $1.84 billion in savings between 2013 and 2015—nearly twice as much as the $954 million CMS data show the ACOs saved. Overall, the report stated that MSSP ACOs reduced Medicare spending by $542 million after accounting for bonus payments CMS paid to participating ACOs. The researchers noted that those figures conflict with CMS data suggesting the ACOs actually increased spending by $344 million over that time.

    Robert Mechanic, executive director of the Institute for Accountable Care who consulted with Dobson DaVanzo & Associates on the methodology used for the report, said, "We hope that the [report] is going to change the narrative, and the narrative out there has been ACOs that don't take on risk don't save money, in fact they probably lose money. And that is not true" (Castellucci, Modern Healthcare, 9/11; Diamond, "Pulse," Politico, 9/11; NAACOS report, 9/11).

    Next, learn how the Medicare ACO models stack up

    Hospitals, health systems, and physician groups across the country continue to evaluate the menu of Medicare ACO options. Whether applying for the first time, graduating to downside risk, or tracking CMS's evolving approach to ACOs, leaders need to understand the key details of each model.

    Download this infographic to learn how the different Medicare ACO models stack up.

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