The Centers for Medicare and Medicaid Services (CMS) recently announced that the Medicare Shared Savings Program saved Medicare $1.8 billion in 2022, compared to spending targets for the year. This was the sixth consecutive year that the program generated both overall savings and high-quality performance results and the second-highest annual savings for Medicare since the program started more than a decade ago.
Shared Savings Program Accountable Care Organizations (ACOs) are groups of medical providers and hospitals who agree to collaborate and provide coordinated high-quality care to Medicare beneficiaries. ACOs have a focus on providing the right care at the right time, all while avoiding any unnecessary services or medical errors. When an ACO delivers high quality care and spends health care dollars efficiently, the ACO may be eligible to share in the savings it generates for the Medicare program. ACO arrangements also tend to lower health care costs for Medicare beneficiaries, as they tend to have lower out-of-pocket spending because the ACO coordinates better care, helping to avoid emergency room visits and other expensive health care services.
As of January 2023, Shared Savings Program ACOs included more than 573,000 participating clinicians, providing care to nearly 11 million Medicare beneficiaries. Because the program has successfully resulted in better patient outcomes and financial savings, CMS has set a goal that 100 percent of people with Traditional Medicare will be part of an accountable care relationship by 2030.
Nearly 2/3 (63%) of participating ACOs earned payments for their performance in 2022 and ACOs that earned greater shared savings tended to be lower revenue. Low-revenue ACOs are mainly ACOs made up of physicians that may include a small hospital or serve rural areas. Low-revenue ACOs led high-revenue ACOs in net savings, with $228 per capita in net savings compared to $140 per capita net savings, and low-revenue ACOs made up of 75% primary care clinicians or more saw $294 per capita in net savings.
Earlier this year, CMS proposed changes to the Medicare Shared Savings Program that would promote participation among health care providers and promote equity, helping the program continue to grow and improve access to coordinated, efficient, and high-quality care for Medicare beneficiaries. Comments in response to the proposal were due in September 2023 and we now await the Calendar Year 2024 Physician Fee Schedule that should outline any changes.
“This program has delivered more than $1.8 billion in savings and delivered high-quality health care to millions of people,” said Health and Human Services (HHS) Secretary Xavier Becerra. “Just last month, we proposed ways to further grow and expand this successful program, especially in rural and other underserved communities. The Biden-Harris Administration will continue to do everything we can to strengthen Medicare and ensure everyone can access high-quality, affordable health care.”
“The Medicare Shared Savings Program helps millions of people with Medicare experience coordinated health care while also reducing costs for the Medicare program,” said CMS Administrator Chiquita Brooks-LaSure. “CMS will continue to improve the program, and it is exciting to see that Accountable Care Organizations are continuing to be successful in delivering coordinated, high-quality, affordable, equitable, person-centered care.”