On October 29, the data analytics contractor hired by CMS to evaluate Year 1 performance by accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP) shared its findings during a participant-only webinar. The purpose of the webinar was to provide the 220 ACOs that joined the MSSP in April and July 2012 and January 2013 with detailed explanation of the Year 1 quality and financial performance reports these ACOs recently received.
As CMS reported publicly September 16, 58 of the 220 ACOs generated savings in excess of the 2% minimum savings rate. Of those 58, 52 will receive a total of $315 million in shared savings. The other six ACOs failed to report quality data, and thus were not eligible for shared savings.
According to the data presented during the webinar, another 60 ACOs generated savings, but were not eligible for shared savings because they did not meet the minimum savings rate. Finally, the remaining 102 ACOs did not realize savings, and 43 of those ACOs would have had to pay a penalty if they had been participating in the two-sided model (which they were not).
While the ACOs’ Year 1 financial performance may seem underwhelming, their quality performance was impressive. As compared to their counterparts, physicians in ACOs are scoring higher on more than 75% of the MSSP quality measures. Also, ACOs with 2012 start dates have shown improvement on more than 90% of those measures.
CMS maintains the MSSP is a “learning lab,” with participating ACOs identifying and implementing best practices over time. According to CMS, judging the program solely on Year 1 financial results is short-sighted, as many of these best practices are just now taking hold.
The webinar delved into these best practices, taking a close look at how the 58 ACOs achieved savings. This included the following findings:
- On average, the 58 ACOs lowered inpatient costs by 9.5%. The ACOs with the poorest financial performance saw a 6% increase in inpatient costs.
- The top-performing ACOs reduced skilled nursing facility costs by nearly 20%, while the poor performers had a 15% increase in this category.
- There appears to be little correlation between the size of the ACO and the savings generated. The ACOs with the smallest number of attributed beneficiaries performed as well as those with the highest number.
The most interesting results, however, are found by analyzing the 58 ACOs’ scores on MSSP quality metrics. These ACOs were top performers on a multitude of expenditure and utilization measures, which is indicative of strong care management programs. While the data does not prove a causal link between care management and cost savings, it clearly demonstrates a strong correlation.
Based on these results, those evaluating strategies for success under value-based payment models should focus on developing care management capabilities. This is especially true given Medicare will begin paying a per-beneficiary-per-month chronic care management fee in January 2015 at a proposed rate of about $42.00 per month. Commercial payers are likely to follow suit in the near future.
These payments will assist providers in building the infrastructure, including staff and supportive technology, which is necessary to manage high-risk, high-cost (and rising-risk and rising-cost) patients, including staff and supportive technology. It’s like having your cake (fee-for-service payments for chronic care management) and eating it, too (generating savings). “So, let them eat cake!”