The first-year results of accountable care organizations in the Medicare Shared Savings Program brought on some mixed reactions last week, but there are a few important things to note about what these intiital results say about the program.
Of the 114 ACOs that joined the Medicare Shared Savings Program in 2012, just 54 saved money in their first 12 months, and only 29 of those generated enough savings to share in them with Medicare. All together, the Shared Savings and Pioneer ACO programs saved Medicare more than $380 million in their first year.
David Muehlstein, PhD, director of research at Salt Lake City-based Leavitt Partners, made some sense of the results in a blog post for Health Affairs. He said the preliminary results are interesting but "notably incomplete." Nonetheless, he outlined a few key takeaways that can be garnered from the results.
• One likely reason some ACOs did not realize first-year savings is because they spent much of the time establishing processes they believe will lead to lower costs. Many ACOs entered into the contract before making all the necessary infrastructural, technological and staffing changes to effectively coordinate care. These competencies are slow to develop, especially for ACOs that had minimal previous experience coordinating care, thus limiting their ability to curb costs.
• What did those 29 ACOs do differently? Twenty-nine first year MSSP ACOs saved enough to share the savings with Medicare, but it's not clear what they did differently from ACOs that failed to achieve savings, wrote Dr. Muehlstein. CMS also doesn't specify these ACOs by name. Nonetheless, Dr. Muehlstein said those ACOs "do offer strong evidence that achieving savings is possible under the MSSP."
• Results under the upside-only arrangement may prove influential to CMS. MSSP ACOs are, for the most part, currently engaged in upside-only contracts with CMS. Under this model, ACOs share in less savings compared to contracts with downside risk — 50 percent compared to 60 percent — but if they lose money, they are not required to pay losses back to CMS. "If positive cost and quality results can be achieved without providers bearing downside risk, CMS may choose to lengthen the time that ACOs can be in upside-only arrangements to increase the aggregate number of providers involved in the program," wrote Dr. Muehlstein.
• It's unlikely ACOs-in-waiting are completely swayed by these initial results. Many organizations are preparing to potentially become ACOs and are looking for proven models, and they are likely to view these results slightly negatively, wrote Dr. Muehlstein. Fewer than half of the MSSP ACOs achieving savings "is not a strong indication that the savings are sufficient to offset the implementation costs."
• The results aren't a home run, but not an indication that the MSSP program is bound to fail. "Not all organizations achieved savings, but some did, and they will serve as roadmaps for others to follow. The over 300 ACOs in the MSSP still have two or three more years before they are all required to bear downside risk, providing them more time to learn how to provide better coordinated care," wrote Dr. Muehlstein.
More Articles on ACOs:
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How Did Individual Pioneer ACOs Fare in Their First Year?
Accountable Care Organizations: 2013 Year in Review