By Mark A. Rucci
SpectraMedix ACO and Health Plan Product Manager

On Thursday, August 30, 2018, the Centers for Medicare and Medicaid Services (CMS) released the 2017 financial and quality performance results for Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs) and they show continued improvement and substantial savings for Medicare.

UPTICK IN THE NUMBER OF ACOS GENERATING SAVINGS
In 2017, 472 MSSP ACOs coordinated care for nearly 9 million Medicare fee-for-service beneficiaries and generated gross savings of $1.1 billion or 1.3% of the aggregate benchmark budget set by CMS. Net savings to the Medicare Trust Fund were $314 million after deducting the $781 million in shared savings payments made to the ACOs that generated the savings. Overall, 60% of the 2017 ACOs generated savings which is up from in 56% in 2016. Of these, 34% earned a shared savings payment, up from 31% last year.

ACOS CONTINUE TO DEMONSTRATE QUALITY
MSSP ACOs also continued to show strong quality performance in 2017 with an average quality score of 92.4%. Track 1 and Track 2 ACOs produced quality scores near the national average, while the average Track 3 ACO quality score was 95.1%. Altogether, only 5 ACOs had a quality score below 70% and only 10 ACOs scored under 80%.
Looking further within the financial results, the 433 upside-only Track 1 ACOs generated 89.2% of the gross savings and 92.6% of the net savings. This is not surprising given that Track 1 ACOs make up 91.7% of the MSSP ACOs.

NET “PER BENEFICIARY” AND “PER ACO” SAVING ACROSS TRACKS UNEXPECTED
In order to make comparisons with the performance of the two-sided risk Track 2 and Track 3 ACOs, we look at the net savings on “per ACO” and “per beneficiary” bases. Track 1 ACOs generated average net savings of $671K per ACO and $35.80 per assigned beneficiary. As a group, the six Track 2 and 33 Track 3 ACOs operating under two-sided risk arrangements only generated net savings of $595K per-ACO and $26.50 per beneficiary.

However, separating the performance of Track 2 and Track 3 ACOs shows a different pattern. A closer look reveals that the six Track 2 ACOs outperformed all other ACO tracks with average savings of $868K per ACO and $75 per beneficiary. However, only 50% of the Track 2 ACOs generated savings which is below the 60% average for all MSSP ACOs. The remainder of the CMS savings generated by these ACOs came through shared loss payments. It is difficult to label Track 2 performance as outstanding. Underperforming all other ACO tracks, the 33 Track 3 ACOs, which have the greatest amount of downside risk, generated only $545K per ACO and $22.34 per beneficiary in net savings.

RETHINKING PATHWAYS TO SUCCESS BASED ON 2017 RESULTS
These performance statistics contradict the assertion made by CMS Administrator Seema Verma that savings increase as ACOs take on downside risk. This is one of the key tenets of CMS’ recently proposed overhaul to the MSSP called Pathways to Success which calls for ACOs to move to two-sided risk arrangements more quickly. The 2017 performance should cause CMS to rethink the assumptions it made in designing the Pathways to Success program.

MSSP ACO Financial Results – PY 2017

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