More than half of accountable care organizations in the Medicare Shared Savings Program generated savings last year, the Centers for Medicare and Medicaid Services announced Tuesday.
These ACOs saved Medicare $1.66 billion last year—0.2% of total Medicare spending—making 2021 the fifth consecutive year the program netted savings. Still, performance declined from the prior year, when the ACOs saved $1.9 billion. About 58% of participating ACOs shared in the savings in 2021, down from 67% in 2020.
The decrease does not seem significant to the National Association of Accountable Care Organizations, CEO Clif Gaus said.
“This is almost the fourth year of no growth, yet we’re at least holding our level here in savings despite all the disruptions from COVID,” Gaus said. “I hope that hospitals that have really been impacted financially by COVID will still see a way to invest money in new accountable care organizations,” he said. Growth in the program has leveled off in recent years: ACOs covered 10.7 million lives in 2021, down from 11.2 million in 2020, according to CMS data.
Low-revenue ACOs created $237 in per capita net savings last year, while high-revenue ACOs garnered $124 per capita. Low-revenue ACOs’ Medicare yield is less than 35% of its Medicare spending, a distinction that allows them to remain in lower-risk arrangements for longer. Hospital-led ACOs tend to be classified as high-revenue. ACOs comprising mostly primary care providers saw $281 in per capita net savings, compared to $149 for ACOs composed of fewer than 75% primary care clinicians.
Ninety-nine percent of ACOs in the program met quality standards that enable them to earn shared savings for last yeare. ACOs earned $1.96 billion in performance bonus payments in 2021 compared to $2.3 billion the year before.
Providers in the Medicare Shared Savings Program form ACOs to coordinate care and improve quality. Participation is voluntary and providers are eligible for bonuses based on quality and cost metrics.
Last month, CMS proposed an overhaul of the Medicare Shared Savings Program aimed at attracting more providers, especially those in rural and other underserved areas. CMS wants to offer advance payments to certain low-revenue ACOs, longer timelines for shifting to two-sided risk, improved benchmark calculations and more. CMS projects the revised policies could increase shared savings payments to ACOs by $650 million a year. CMS plans to release a final policy this fall and most of the changes would take effect next year.
The Medicare Shared Savings Program is crucial to CMS’s stated goal of all Medicare beneficiaries being served by accountable care arrangements, said Dr. Farzad Mostashari, CEO of Aledade, a company that helps physicians transition into value-based care.
“Today’s news is a reminder that CMS’ goal to have every Medicare beneficiary in an accountable care relationship by 2030 is the right thing to do,” Mostashari said in a news release. “We need to get more physicians and patients into these payment models as quickly as possible.”