ACOs Receive $422 Million in Shared Savings Payments

The Accountable Care Organization program is finding firmer footing, third year program results from the Centers for Medicare & Medicaid Services (CMS) suggest. Quality and financial performance results show that in 2014 ACOs grew, had a more positive impact and improved with age.

Made up of groups of doctors, hospitals and other health care providers, including home health agencies, more than 420 Medicare ACOs have been established since passage of the Affordable Care Act, an increase from 360 in 2013. CMS expects the number of beneficiaries served by ACOs to continue to grow, as it has in the last few years. Currently, ACOs serve more than 7.8 millions Americans with Medicare as of January 1, 2015.

The general ACO concept is that member organizations collaborate on patient care to improve outcomes while lowering costs; providers in an ACO can share in cost savings achieved. Because ACOs put a premium on care coordination as a patient moves from the acute care setting to post-acute settings, they are credited with raising the profile and importance of home health.

In 2014, 20 Pioneer and 333 Shared Savings ACOs generated more than $411 million in total savings, the data shows. Those savings include all total savings and losses. Only 97 ACOs met the savings threshold and quality standards to qualify for shared savings payments of more than $422 million.

“These results show that accountable care organizations as a group are on the path towards transforming how care is provided,” Andy Slavitt, CMS acting administrator, said in a statement. “Many of these ACOs are demonstrating that they can deliver a higher level of coordinated care that leads to healthier people and smarter spending.”

Pioneer ACOs improved in 28 of 33 quality measurements, with average improvements of 3.6% across all quality measurements. The mean quality score increased to 87.2% in 2014, up from 85.2% in 2013 and 71.8% in 2012, the first two years of the program. Total savings increased 24% from 2013, reaching $120 million. However, three Pioneer ACOs generated losses outside the minimum rate and are paying $9 million in shared losses.

Shared savings ACOs fared better, and those that had been in the program longer were likely to do better to meet savings goals. Ninety-two shared savings ACOs held spending $806 million below their targets, earning performance payments of more than $341 million, compared to $705 million in held spending and $315 million in performance payments from 58 ACOs in 2013. None owed losses. 

The CMS results underscore that ACOs that have been in the program longest seemed to have found their footing, as more of these reached savings limits and improved in quality measurements.

Written by Amy Baxter