ACOs Saved Medicare $1 Billion in First Three Years

With the goal of reducing overall care costs, home health agencies are increasingly playing a role in accountable care organizations (ACOs), according to a recent report from the Office of Inspector General (OIG)—and the groups are saving money.

In the first three years of the Medicare shared savings program, 428 ACOs served 9.7 million beneficiaries, achieving a net spending reduction of nearly $1 billion, OIG found. One-third of ACOs reached benchmark goals to share in the savings, with the most established ACOs more likely to reduce spending than other groups. At the same time, ACOs generally improved the quality of care they provided based on CMS’s quality measures.

Over the three years, from 2013 to 2015, ACOs also were more likely to include other care providers beyond physicians, such as hospitals, nursing homes, home health agencies and hospices. ACOs also generally improved quality of care, outperforming fee-for-service providers on 81% of quality measures.


The highest performing ACOs—those with substantial reductions in spending that were in the program for all three years—reduced spending for five of the seven types of services reviewed by OIG, with the biggest spending reductions in hospital inpatient care, followed by skilled nursing facility (SNF) care, home health care, durable medical equipment and hospice care. These ACOs also typically saw a greater number of beneficiaries and were made up primarily of physicians.

From 2010 to 2015, the average spending per beneficiary for home health care declined $198 among the high-performing ACOs. Across national fee-for-service spending, home health care spending on average dropped $46 per beneficiary, according to the data.

See the full report here.


Written by Amy Baxter

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