Medicare ACOs slow to earn saving bonuses

Although Medicare's 20 Pioneer and 333 Shared Savings Program accountable care organizations (ACOs) generated more than $411 million in savings in 2014, three out of four of these ACOs did not slow health spending enough to earn bonuses last year.

The Centers for Medicare & Medicaid Services released the 2014 data that “show that ACOs with more experience in the program tend to perform better over time,” according to a release. 

Last year, 97 ACOs earned bonuses totaling $422 million out of $833 million in savings they produced. Savings are awarded under formulas that account for performance on quality targets after the first year in the program. ACOs must report quality scores in their first year but do not have to meet performance targets.

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

In the third performance year, Pioneer ACOs showed improvements in 28 of 33 quality measures and experienced average improvements of 3.6 percent across all quality measures. Shared Savings Program ACOs that reported quality measures in 2013 and 2014 improved on 27 of 33 quality measures. 

ACOs with more experience in the program tend to perform better over time, the agency noted. Of the 333 Shared Savings Program ACOs, 119 are in their first performance year in Track 1, which involves standing up the program without the financial risk associated with later tracks.