Medicare ACOs Saved $4.1B in 2020

The Medicare Shared Savings Program collectively saved Medicare $4.1 billion last year and $1.9 billion after accounting for shared savings payments.

It is the highest annual savings to date for the accountable care organization model that served 10.6 million seniors in 2020.

The accountable care organizations had an average quality score of 97.8% and 60 earned a score of 100%. The results are an improvement over the $2.6 billion and $1.2 billion in gross and net savings in 2019.

“Today’s data underscore the need for policymakers to do all they can to grow the ACO model and extend the program’s benefits to more patients,” Clif Gaus, Sc.D., president and chief executive officer of the National Association of ACOs, said in a statement. “We currently have the fewest number of Shared Savings Program ACOs since 2017. That trend must be reversed, given continued debate about ways to improve our health system.”

Additionally, in 2020 there was $390 in gross savings per beneficiary. And 67% of ACOs earned shared savings. In shared saving payments, ACOs made $2.3 billion. Three-quarters of shared savings-only ACOs produced gross savings and 55% earned shared savings. What’s more, 97% of at-risk ACOs produced gross savings and 88% earned shared savings.

More data demonstrate ACOs are lowering Medicare spending by 1-2%, which can be tens of billions of dollars of reduced Medicare spending annually.

ACOs played a key role in managing patient care at the onset of the COVID-19 pandemic and throughout 2020. The organizations were proactive in outreach to high-risk patients to keep them healthy, and established telehealth and remote monitoring and effectively managed home visits and post-acute care to reduce transmission of the virus.

The purpose of ACOs is to provide another method besides fee-for-service by holding groups of physicians, hospitals, and other providers accountable for the cost and quality of a particular group of patients. ACOs can share with Medicare savings earned if they meet a spending and quality metrics.