Savings from Medicare Accountable Care Organizations (ACOs) and Pioneer ACOs exceeded $380 million in their first year, according to newly released findings from the Centers for Medicare & Medicaid Services.
The development and expansion of ACOs is a trend many providers are watching, as they likely could become referral partners for HME businesses in increasing numbers in the near future. This will be important because of the ACOs’ central mission of increasing outcomes while driving down costs.
The new findings cover interim financial results for select Medicare ACO initiatives; a savings analysis for Pioneer ACOs; results from the Physician Group Practice demonstration; and expanded participation in CMS’s Bundled Payments for Care Improvement Initiative.
In that regard, results released today for the Medicare Shared Savings Program ACOs show that, in their first 12 months, 54 out of 114 of the 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, CMS reported. Those ACO also 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 health care costs while meeting standards for high quality care.
CMS also reported that an independent preliminary evaluation of the Pioneer ACO Model, which is designed for more experienced organizations prepared to take on greater financial risk, shows tjose 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.
Additionally, CMS also reported that the Physician Group Practice Demonstration initiatives, which offer incentive payments for delivering high-quality, coordinated health care that generates Medicare savings, showed overall savings over the 5 year experience with 7 out of 10 physician group practices earning shared savings payments for improving the quality and cost efficiency totaling $108 million.
Lastly, CMS 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.
“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”, said Dr. Barbara Walters, executive medical director for accountable care, with the Dartmouth-Hitchcock ACO. “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.”
“Our experience has shown that ACOs can increase quality while lowering costs,” said Dr. Kenneth W. Wilkins, president of Coastal Carolina Health Care. “As a result of the programs we’ve initiated, our patients have experienced better access to their primary care physician, higher quality measures, and fewer trips to the hospital”
Final performance year-one results will be released by CMS later this year.