Menu Close

CMS Releases 2014 ACO Results; Is Experience the Sole Determinant of ACOs’ Performance Results?

Posted in Accountable Care Organizations, Affordable Care Act, Home Healthcare, Hospitals and Institutions, Legislation and Public Policy, Medicare and Medicaid, Private Insurers, Reimbursement Matters

On August 25, the Centers for Medicare & Medicaid Services (CMS) released information on the 2014 quality and financial performance results for the accountable care organizations (ACOs) participating in the Pioneer model (Pioneer ACOs) and the Medicare Shared Savings Program (MSSP ACOs).

Since the launch of the Pioneer model in 2012, Pioneer ACOs have been required to assume some risk of financial losses in order to receive a portion of shared savings (referred to as two-sided risk). In contrast, MSSP ACOs are able to chose from two payment models: Track 1, which allows payment for shared savings (one-sided risk), or Track 2, which provides greater opportunity to share in any savings in exchange for the MSSP ACO agreeing to share responsibility with CMS for possible financial losses (two-sided risk). According to CMS, there were only three MSSP ACOs participating in Track 2 in 2014.

The results recently released by CMS show that for the 20 Pioneer ACOs that participated in the program in 2014 (which was Performance Year 3), 15 generated savings and 11 (55%) produced enough savings and achieved the requisite quality metrics to earn shared savings. Three Pioneer ACOs are required to pay CMS for shared losses. In contrast, the results indicate that for the 404 MSSP ACOs participating in Tracks 1 and 2 in 2014, only 333 generated any savings and only 92 (22.7%) achieved savings and met the threshold quality performance goals. None of the three Track 2 MSSP ACOs owe CMS payments for losses. Based on these results, CMS concluded that “…ACOs with more experience in the program tend to perform better over time.”

However, is experience the only explanation for the results? Granted, most of the Pioneer ACOs are larger, more established healthcare organizations with the requisite infrastructure and experience in managing cost and quality of care. But does that entirely explain the difference between 55% of the Pioneer ACOs performing at the level necessary in order to achieve shared savings versus only 22.7% of the MSSP ACOs doing so? Or the fact that none of the Track 2 MSSP ACOs owed CMS for losses? It appears that additional analysis is required to determine how, if at all, having financial risk affects the performance of the ACOs participating in Medicare models. This expanded analysis is particularly important in view of CMS’s recent change (discussed here) which allows MSSP ACOs to continue in Track 1 with one-sided risk for another three-year contract term, rather than being required to transition to Track 2 with two-sided risk.

Leave a Reply

Your email address will not be published. Required fields are marked *