Medicare ACO Savings Increased to $4.1B in 2020

Medicare ACO savings hit a record high, with accountable care organizations collectively saving Medicare $4.1 billion in 2020, according to a new report.

The total savings, along with the $1.9 billion in net savings after accounting for shared savings payments, made 2020 the best year yet for the Medicare Shared Savings Program, report author National Association of ACOs (NAACOS) stated.

The ACOs also achieved an average quality score of 97.8 percent last year, with 60 ACOs earning a perfect score of 100 percent, NAACOS reported using performance data recently released by CMS.

“Today’s data underscores 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, ScD, president and CEO of the National Association of ACOs (NAACOS), said publicly. “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.”

According to CMS data, there are currently 477 ACOs participating in the Shared Savings Program—Medicare’s largest alternative payment model. The participation level is a significant decrease from the 2020 performance year, which saw 517 ACOs participate. Previously, there were 487 ACOs participating in 2018, 561 ACOs in 2017, and 480 ACOs in 2017.

The number of Medicare beneficiaries covered by ACOs in the program has also declined to 10.7 million beneficiaries in 2021 compared to 11.2 million in 2020, which was the highest number of covered lives since the Shared Savings Program’s launch in 2012.

NAACOS has cited changes to the Shared Savings Program established under the Trump Administration to the decline in ACO participation. The association has argued that the Pathways to Success reforms, which now require ACOs to assume downside financial risk sooner, among other changes, are directly to blame for lower participation numbers.

Despite the changes though, Medicare ACOs participating last year improved total savings from $2.6 billion the previous year. The ACOs also increased net savings (after accounting for shared savings payouts) from $1.2 billion in 2019.

NAACOS also highlighted from the latest performance data:

• $390 in gross savings per beneficiary
• 67 percent of ACOs earned shared savings
• ACOs earned $2.3 billion in shared savings payments
• 75 percent of shared savings-only ACOs generated gross savings and 55 percent earned shared savings
• 97 percent of at-risk ACOS produced gross savings and 88 percent earned shared savings

“During the pandemic-stricken year of 2020, ACOs were valuable assets in managing patient care. Given their accountability to long-term patient care and outcomes, ACOs were proactive in their outreach to high-risk patients to keep them healthy, quickly established telehealth and remote monitoring capabilities to continue to provide care, and effectively managed home visits and post-acute care to reduce COVID transmission,” NAACOS stated in the report.

The association, along with 11 other industry groups, recently called on lawmakers to reform Medicare ACO programs through the Value in Health Care Act of 2021 (HR 4587). The bill would modify shared saving rates, risk adjustment methodologies, and benchmarks, as well as provide educational and technical support for ACOs.

The groups said the bill “removes barriers to participation” and would “save the Medicare Trust Fund $280 million over 10 years.”

The bill comes at a time when lawmakers are seeking ways to fund a $3.5 trillion budget, which was passed by the House earlier this week.