Home Health & Hospice

CMS: ACOs bolster Medicare savings and quality care delivery

Homecare Insider, September 22, 2014

Last week, CMS released quality and financial performance results that suggest Medicare Accountable Care Organizations (ACO) are having a positive impact as they continue to gain traction in the home health sector.
ACOs in the Pioneer ACO Model and Medicare Shared Savings Program generated over $372 million in total program savings for Medicare ACOs, according to the preliminary quality and financial results from the second year of performance for 23 Pioneer ACOs and the final results from the first year of performance for 220 Shared Savings Program ACOs, which are summarized in a fact sheet from CMS.
The findings seem promising for the Pioneer ACO Model, which has seen 10 ACOs abandon ship since the program's inception. Five-hospital system Sharp HealthCare quit in late August, citing issues with the program’s financial model, which brought the count of Pioneer ACOs down to 22.
According to CMS, Medicare ACOs—which have undertaken quality initiatives centered on improving collaboration across the healthcare spectrum and implementing preventative care approaches to keep patients healthier—choose a level of performance risk and receive financial incentives based on that choice and their quality performance. Pioneer ACOs, which made financial, quality of care, and patient experience strides during year two, tend to be more established, assume a greater financial risk, and receive financial rewards for lowering costs. Data shows the mean quality score among this group increased by 19% between 2012 and 2013.
In the Shared Savings program, 53 ACOs held spending $652 million below their targets. In total, the Medicare trust funds will save about $345 million, including repayment of losses for one ACO that overspent its target by $10 million.
An additional 52 ACOs in this realm reduced health costs compared to their benchmark but did not qualify for shared savings because they failed to meet the minimum savings threshold.
New participants in the Shared Savings Program will likely be announced by the end of the calendar year, according to CMS.      
Since passage of the Affordable Care Act, more than 360 Medicare ACOs have been established, which serve over 5.6 million Americans with Medicare.