CMS estimates that between the 2013 and 2015 performance years, accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP) saved $954 million. But according to a new analysis from Dobson DaVanzo & Associates, commissioned by the National Association of ACOs (NAACOS), they actually saved $1.84 billion—almost twice as much.
The analysis also found that MSSP delivered net savings of $541.7 million for 2013-2015 after accounting for shared savings bonuses; this is in contrast to the CMS benchmark calculation, which found that the organizations increased Medicare spending by $344.2 million.
In a press release, NAACOS President/CEO Clif Gaus said: “The analysis should put to rest claims that shared savings only ACOs do not save Medicare money.”
The Dobson DaVanzo & Associates report explains that this discrepancy was caused by the differences in methodology used to calculate ACO savings. The researchers explain: “Despite the positive 2017 results, gauging MSSP performance based on calculations using administratively derived spending targets (benchmarks) is simply not an accurate way to measure overall program savings. In fact, the published academic research on MSSP performance points to much higher savings than are suggested by the benchmarks.” Dobson DaVanzo & Associates used a difference-in-difference regression analysis, a methodology described by the firm as the “gold standard for program evaluation.”
What does this mean for the MSSP?
Earlier this year, CMS proposed to overhaul the MSSP with the “Pathways to Success” model. The new model would accelerate the timeline for ACOs taking on two-sided financial risk to two years (from the original six), and would also reduce the shared savings opportunity for one-sided ACOs from 50% to 25%.
Regarding this proposed change, CMS Administrator Seema Verma said: “Medicare cannot afford to support programs with weak incentives that do not deliver value. ACOs can be an important component of a system that increases the quality of care while decreasing costs; however, most Medicare ACOs do not currently face any financial consequences when costs go up, and this has to change.”
CMS projects the proposed MSSP overhaul will shrink the largest Medicare ACO program by 20% over the next ten years. In light of this new analysis, though, NAACOS and others are calling for changes to the proposed MSSP “Pathways to Success” initiative to ensure that the MSSP ACO model remains sustainable. NAACOS has advised CMS to allow MSSP ACOs to remain in the one-sided financial risk track for at least three years. They also recommend that one-sided risk ACOs that meet specific savings / quality goals over the first three years should also be allowed to stay in the shared savings-only model for another two years. Additionally, they recommend that CMS apply the current 50% shared savings rate for the entire period in the one-sided financial track.