ACOs Push Back on CMS Savings Estimates In New Analysis

A new analysis from a group of more than 300 accountable care organizations (ACOs) argues that the groups generated much more in savings than official estimates would suggest.

The announcement from the National Association of ACOs (NAACOS) claims that ACOs generated gross savings of $1.84 billion for Medicare, almost double the $954 million estimated by the Centers for Medicare & Medicaid Services (CMS).

The post-acute care sector, already being pushed to cut spending and reduce length of stay, has been pressured even more by the announcements about the savings generated by ACOs that divert spending from skilled nursing facilities. Though that’s not the only step the organizations have taken to achieve net savings for Medicare, other research has indicated that ACOs gain by shifting money away from SNFs.


The new study, commissioned by the NAACOS and conducted by Dobson DaVanzo & Associates, found that after accounting for shared savings payments, ACOs in the Medicare Shared Savings Program (MSSP) reduced federal spending by $542 million from 2013 to 2015. The NAACOS said in a press release that the analysis “is the largest ever of ACO performance based on Medicare claims.”

The analysis comes a month after CMS proposed a major overhaul of how groups of providers take on risk when they assume responsibility for the total cost and quality of care for their patients. The proposed “Pathways to Success” overhaul would cut the amount of time an ACO can remain in the MSSP — one of multiple tracks for ACOs — without taking risk to two years at most.

CMS cited the fact that the majority of ACOs in the MSSP are not taking on risk for cost increases as part of the reason the MSSP saw a net gain in spending, rather than savings. The estimates of that increase vary: One calculation by the consulting firm Avalere Health estimated that ACOs in the MSSP increased federal spending by $384 million between 2013 and 2016. CMS estimated the increase in Medicare spending at $344 million, according to the NAACOS press release.


A blog post in Health Affairs by NAACOS president and CEO Clif Gaus and Robert Mechanic, executive director of the Institute for Accountable Care, argued that the CMS proposal would reduce the number of ACOs participating in the MSSP and slow new entrants. In fact, a May survey from NAACOS found that more than 70% of MSSP ACOs would leave the program if they were forced to assume risk.

“We agree with the administration that ACOs need to evolve and take on more financial risk, but the administration’s own estimates suggest that rather than growing, the Medicare ACO program would shrink by 20% over the next decade under its proposed rule,” Gaus and Mechanic wrote. “That would be a tragedy. ”

Written by Maggie Flynn

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