Care Transformation Center Blog

Four takeaways on the recent ACO results

by Rob Lazerow

CMS recently released the initial results for the Medicare Shared Savings Program (MSSP), detailing the financial and quality performance of ACOs that joined the program in 2012 and 2013. Although 220 MSSP ACOs launched across these two years, data were available for 206 of the participating ACOs.

Among the ACOs with data available, 105, or slightly more than half, successful reduced spending below their target. However, only 49 ACOs—24% of participants with data available—earned shared savings payments by both surpassing their minimum savings threshold and reporting quality measures. Overall, these successful ACOs reduced spending by $652 million and earned more than $300 million in performance bonuses. One ACO participating in Track 2, which includes both upside and downside risk, exceeded its spending target and owes Medicare shared losses of $4 million.

Eight insights on ACO bonus distribution models

On the quality front, CMS reported that MSSP ACOs improved on 30 of the program’s 33 quality measures, including measures around provider communication and screening for both tobacco use and blood pressure.

We’ve reviewed the initial year MSSP results extensively and have four key takeaways for health care leaders.

1. Despite the growth of participants, overall success rate remains steady at one in four

The new MSSP results closely mirror the interim results for the 2012 ACOs that CMS reported in January. Even after adding in the 114 ACOs that launched in 2013, the percentage of ACOs qualifying for a bonus remained near 25%. This reinforces the fact that developing an effective ACO in a lengthy process—and that becoming a formal ACO is just one step toward becoming an effective population health manager.

2. ACOs are becoming more effective over time

The new MSSP results include three launch groups: April 2012, July 2012, and January 2013. Among the ACOs with available data, ACOs that joined the program earlier were more likely to qualify for a bonus; 32% of the April 2012 ACOs earned bonuses versus 19% of the January 2013 ACOs. For organizations that earned bonuses, the rewards were larger for the longer established ACOs (average of $8 million for April 2012 versus $3.5 million for January 2013), although this is influenced by having a longer initial performance period.

Case study: Detroit Medical Center’s Michigan Pioneer ACO

3. Quality reporting really pays in MSSP

Four ACOs generated over $33 million in savings but earned $0 in bonus payments because they failed to report quality measures. Being able to both meet and report the program’s quality measures is critical to earning a bonus in MSSP.

4. Success in population health and MSSP are not equal

The list of MSSP participants includes organizations with deep experience managing both populations and risk-based payments—but their prior experience didn’t always translate to a shared savings bonuses. Success in MSSP is heavily influenced by the mechanics of the programs, meaning that factors like the attribution methodology and annual update benchmarking can outweigh successful care management.

Why the ACO 'acid test' isn't the number of dropouts

Tom Cassels, Executive Director

Read my Q&A with the Daily Briefing to see why the acid test isn't whether the ACO program survives, but whether the momentum it's creating for providers to organize and act differently will continue.

Health Care Advisory Board members can also join us at our 2014-2015 national meeting to hear new research on achieving population health ROI.