CMS: ACOs Saved Medicare $1.6B Overall in 2021 as Big Changes on the Horizon

Fierce Healthcare | By Robert King
 
Accountable care organizations saved Medicare $1.66 billion last year as value-based care providers brace for potential major changes to the program like new health equity measures.
 
The Centers for Medicare & Medicaid Services (CMS) announced [last] Tuesday that 2021 was the fifth year in a row that ACOs generated overall savings for Medicare and met quality targets. The announcement comes roughly a month after the agency proposed several changes to entice smaller ACOs to enter the program and prevent an erosion of participation. 
 
“Accountable Care Organizations are a true Affordable Care Act (ACA) success story, and it is inspiring to see the results year after year,” said CMS Administrator Chiquita Brooks-LaSure in a statement.
 
CMS reported that 99% of all ACOs in the Medicare Shared Savings Program (MSSP) met quality standards, and approximately 58% earned shared savings for abiding by spending targets. An ACO agrees to take on a certain degree of financial risk and to meet spending and quality benchmarks.
 
The ACO gets a share of any savings if Medicare spending is below the benchmark and must repay the federal government if it spends too much. 
 
“The type of ACOs that saw more net savings tended to be low-revenue, meaning they were mainly made up of physicians, included a small hospital, or served rural areas,” according to a CMS release on the findings. 
 
A low-revenue ACO generated $237 in savings per capita while higher-revenue programs got $124 in net savings per capita. 
 
CMS also found that physician-led ACOs generated particularly high savings. ACOs that are comprised of 75% primary care physicians or more saw $281 in net savings compared with $149 in net savings for ACOs that had fewer physicians.
 
“These results underscore how important primary care is to the success of the Shared Savings Program and demonstrate how the program supports primary care providers,” CMS said.
 
CMS told Fierce Healthcare that ACOs overall generated $3.6 billion in gross savings for Medicare when not accounting for shared savings payments.
 
In 2020, ACOs generated $4.5 billion in gross savings for Medicare and nearly $2 billion after factoring in the shared savings payments. 
 
The additional savings were notable since ACOs were still facing the financial impact of the COVID-19 pandemic, advocates say. 

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