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The Most Successful ACOs Share This One Quality


An Avalere analysis finds that this factor plays an important role in the era of value-based payment. Find out what it is.



Accountable care organizations (ACOs) with more years of experience in the Medicare Shared Savings Program (MSSP) achieved greater savings, according to a new analysis.

The Avalere analysis found that ACOs with four or more years in the MSSP accounted for nearly all of the $314 million in savings the program achieved in 2017-the first year in which savings were realized. ACOs with one to two years’ experience in the program increased Medicare spending.

Since 2012, the MSSP has grown from 27 ACO participants to 561 in 2018. In 2018, 10.5 million Medicare beneficiaries received care through an ACO.

CMS released the 2017 MSSP public use file, which contains information about each ACO, including benchmarks, expenditures, number of attributed beneficiaries, track, and performance year. Researchers sorted through the data to determine first the overall financial impact, then looked at the impact for each performance year and track, and finally determined how the results were applied on a per-beneficiary basis.

“Avalere also looked at whether successful ACOs bore any downside risk; however, that factor does not appear to be a reliable predictor of an ACO’s success, as each MSSP track-include upside-only-saved money in 2017,” says John Feore, director, Avalere Health, an Inovalon Company.

Read: Research Shows ACOs Aren’t an Effective Way to Curb Healthcare Costs

ACOs are Medicare’s largest attempt to transform fee-for-service healthcare to a value-based system. “Much discussion and analysis has occurred regarding the success or failure of the MSSP to date and CMS has recently proposed a massive overhaul of the program,” Feore says. “We’ve been looking into MSSP results since the beginning of the program and with 2017 being the first ‘successful’ year using CMS’ methodology for financial performance, Avalere wanted to dig into the results further to glean additional information about what makes an ACO successful.”

In 2018, 10.5 million Medicare beneficiaries are receiving care through ACO providers and millions more patients are treated by Medicaid or commercial payer ACOs, according to Feore. “Since experienced ACOs are now generating net savings to CMS, this suggests they can have an important role in the era of value-based payment,” he says. “However, there always will be winners and losers based on how well an ACO uses data, changes underlying care processes, and engages with doctors, providers, and beneficiaries.”

Experience doesn’t seem to be the only contributing factor to success. CMS’ change to the way it calculates ACOs’ performance (i.e., benchmarks) may have contributed to the positive financial results, as well.

Specifically, according to the analysis, in 2017 CMS began to incorporate regional spending into benchmark calculations for ACOs that participated in MSSP for a second agreement period. These ACOs (i.e., those with four years of experience in the program) showed the strongest financial performance in 2017.

“ACOs are growing each year and covering an increasing percentage of Medicare FFS beneficiaries,” Feore says. “While CMS’ proposal may slow down the growth of the program, continued provider interest in ACOs will cause their importance to the healthcare system to remain. We have seen that physician-led ACOs tend to be more successful, and if this trend holds, these ACOs in particular will grow in importance.”

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