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ACO Savings For Medicare Continue Gaining Momentum

stethascope with dollars for ACO savings The number of Medicare Shared Savings Program (MSSP) ACOs has increased to 409 participants, with 89 officially joining as of January 1, 2015. Along with the 19 Pioneer ACOs, a combined total of 424 ACOs across the U.S. are serving more than 7.8 million Medicare recipients.

While the first two years of the ACO program’s efforts have had mixed results, organizations continue being intrigued to join and cost reductions are steadily growing. Keep in mind, these organizations don’t receive any payment benefits if they’re not meeting the anticipated results.

ACO Savings: Year One, 2012

During the program’s first year, more than half of the initial 114 ACOs did not reach the savings goals that were set, but there were still nearly half that did. Having some organizations underperforming hinders the fact that whether the savings are below the goal or not, costs were still reduced and that is a good thing.

Combined, Pioneer and MSSP ACOs saved Medicare more than $380 million. Of the 23 Pioneer ACOs, nine achieved savings significantly lower than Medicare’s fee-for-service billing model allowed and also enhanced performance. Pioneer ACOs improved the patient experience and Medicare spending levels, and received an overall quality score of 70.8%, according to Advant Edge.

Fifty-eight MSSP ACOs reduced spending by $705 million and received a shared performance payment of more than $315 million. In addition to cost savings, the MSSP ACOs received higher scores on 30 of the 33 quality measures, according to CMS.

ACO Savings: Year Two, 2013

ACOs were structured for long-haul cost reduction, not for a money-saving sprint. In year two, Pioneer ACOs achieved $96 million in cost reductions. They also improved overall quality score by 13.2%, bringing it to 84% for year two.

MSSP ACOs reduced expenses by $652 million and continued to improve on 30 of 33 quality measures. Fifty-three MSSPs achieved results great enough to be a part of the $300 million in shared payment.

Together, as of 2014, the two ACO programs had saved $817 million—$372 million in Medicare savings and $445 million towards shared reimbursements for the ACOs.

As the contracts of more than 200 ACOs are set to expire this year, CMS has altered its initiatives to give the organizations incentive to stay in the program. One of these changes will allow participants to avoid penalties for three years instead of six years.

As CMS continues to fine-tune program standards and facilities continue participating in ACOs, expect health care to continue improving. When appropriate actions are taken, the program has proved capable of achieving higher levels of care for patients while also lowering Medicare spending.

At General Medicine, The Post-Hospitalist Company, our goal is to ensure your facility is taking the required steps to achieve cost savings and increased care. Our post-acute care professionals bring extensive knowledge and undivided attention to your organization, allowing you to reach CMS’ standards and receive the many benefits ACOs have to offer.

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Tom Prose

CEO at General Medicine, P.C.
As founder and CEO of General Medicine PC, the nation’s premier post-hospitalist care company,Tom Prose leads an exceptional team of internal medicine, geriatrics and healthcare administration specialists.