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CMS releases report on savings generated by ACOs and more

Friday January 31, 2014
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The Centers for Medicare & Medicaid Services has released findings on a number of its initiatives to reform the healthcare delivery system through the Affordable Care Act.

These include interim financial results for select Medicare accountable care organization initiatives, an in-depth savings analysis for Pioneer ACOs, results from the Physician Group Practice demonstration and expanded participation in the Bundled Payments for Care Improvement initiative.

Savings from both the Medicare ACOs and Pioneer ACOs exceed $380 million, according to a CMS news release.

“These innovative programs are showing encouraging initial results, while providing valuable lessons as we strive to improve our nation’s healthcare delivery system,” HHS Secretary Kathleen Sebelius said in the news release. “Today’s findings demonstrate that organizations of various sizes and structures across the country are working with their physicians and engaging with patients to better coordinate and deliver high quality care while reducing expenditure growth.”

ACO results

Interim financial results released for the Medicare Shared Savings Program ACOs show that, in their first 12 months, 54 of 114 ACOs that started program operations in 2012 already had lower expenditures than projected.

Of the 54 ACOs that exceeded their benchmarks in the first 12 months, 29 generated shared savings totaling more than $126 million. In addition, these ACOs generated a total of $128 million in net savings for the Medicare Trust Funds. ACOs share with Medicare any savings generated from lowering the growth in healthcare costs while meeting standards for high quality care. Year-one final performance results will be released later this year.

While evaluation of the program’s overall impact is ongoing, the interim results are within the range originally projected for the program’s first year. A significant majority of the program’s overall net impact was projected to phase-in over the program’s ensuing performance years, according to CMS.

“Our experience has shown that ACOs can increase quality while lowering costs,” Kenneth W. Wilkins, MD, president of Coastal Carolina Health Care, said in the news release.

An independent preliminary evaluation of the Pioneer ACO model — the ACO model designed for more experienced organizations prepared to take on greater financial risk — shows Pioneer ACOs generated gross savings of $147 million in their first year while continuing to deliver high-quality care. Results showed that of the 23 Pioneer ACOs, nine had significantly lower spending growth relative to Medicare fee-for-service while exceeding quality reporting requirements.

These savings far exceed findings from a previous analysis conducted by CMS, which used a different methodology.

“We are still early on in the program, but are encouraged by these results and are on track to meet our goals for participation in the Pioneer accountable care organization model," Barbara Walters, DO, executive medical director for accountable care with the Dartmouth-Hitchcock ACO, said in the news release.

“Our strategies of using patient outreach and education and regular follow up for targeted chronic disease programs are allowing us to anticipate patient needs before their health problems become worse. Involvement in the Pioneer model is helping us provide better treatment for our patients across a wide range of health challenges.”

Other initiatives

CMS also released results today for the Physician Group Practice Demonstration initiatives, which offered incentive payments for delivering high-quality, coordinated health care that generates Medicare savings.

The Physician Group Practice Demonstration evaluation report confirmed overall savings over the five-year experience, with seven of 10 physician group practices earning shared savings payments for improving the quality and cost efficiency totaling $108 million over the course of the demonstration. The participating organizations consistently demonstrated high quality of care on a broad range of chronic disease and preventive care measures.

CMS also announced that 232 acute care hospitals, skilled nursing homes, physician group practices, long-term care hospitals and home health agencies have entered into agreements to participate in the Bundled Payments for Care Improvement initiative.

Bundling payment for services that patients receive across a single episode of care, such as heart bypass surgery or a hip replacement, is one way to encourage physicians, hospitals and other healthcare providers to work together to better coordinate care for patients, both when they are in the hospital and after they are discharged, according to CMS.

This is the largest and most ambitious test ever of a bundled payment model in Medicare or any other payer in the U.S. Through this initiative, CMS will test how bundled payments for clinical episodes can result in more coordinated care for beneficiaries and lower costs for Medicare.


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