CMS spent more in ACO bonuses than program saved in 2015

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While CMS touted the latest quality and financial reports from Medicare accountable care organizations (ACO) as positives, its data said the agency spent $217 million more in awarding bonuses to ACOs than what the programs are projected to have saved.

CMS said ACOs involved in either the Pioneer ACO model or the Medicare Shared Savings Program (MSSP) saved about $466 million in 2015. Organization can receive shared savings bonuses if they reduce spending below standards by a certain percentage which depends on the size of the ACO, and in 2015, CMS shared $683 million of the savings with the ACOs.

“The coordinated, physician-led care provided by Accountable Care Organizations resulted in better care for over 7.7 million Medicare beneficiaries while also reducing costs,” said CMS Acting Administrator Andy Slavitt. “I congratulate these leaders and look forward to significant growth in the program in the coming year.”

Fewer than one-third of organizations earned bonuses: 119 of the 332 MSSP ACOs and six of the 12 in Pioneer ACO. CMS said another 83 MSSP ACOs lower costs below their benchmarks, but didn’t qualify for bonuses for other reasons. Four Pioneer ACOs generated losses in 2015.

On quality measures, the agency said the mean quality score among Pioneer ACOs increased by 5 percentage points, with nine having overall scores above 90 percent. For MSSP, ACOs which reported on quality in 2014 and 2015 “improved on 84 percent of the quality measures that were reported in both years.”

The National Association of ACOs (NAACOS) had a mixed reaction to the results, saying while the financial results have improved, the current program “have too many defects” to be viable long-term.

“The results are not as strong as we, and many of our ACO members, had hoped for. But overall we are pleased to see the results show a positive trend for the program,” said Considering MSSP ACOs are only a few years old, they have accomplished a lot to reduce cost and improve quality. These ACOs are on the front line of redesigning the healthcare industry, and this is a moment to celebrate them and their hard work,” said NAACOS President and CEO Clif Gaus.

Gaus said his organization has encouraged federal agencies and Congress to take several actions to support ACO models, such as including all ACOs in the final list of advanced alternative payment models under the final rule implementing the Medicare Access and CHIP Reauthorization Act (MACRA).