ACO Financial Results Unsatisfying: Medicare Advisory Panel

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By Michael D. Williamson

Oct. 6 — Accountable care organizations haven’t created substantial savings for the government and some should be pushed to take on more risk, Congress’s Medicare advisers said Oct. 6.

ACOs are groups of doctors, hospitals and other providers working together to provide better, more coordinated care with the aim of lowering Medicare’s costs. However, ACOs in the Medicare Shared Savings Program cost the Centers for Medicare & Medicaid Services $216 million in 2015, staff with the Medicare Payment Advisory Commission (MedPAC) said in a presentation.

Data on ACOs reported by MedPAC offer a more detailed look at the ACOs compared with the program information the CMS has released. For example, in 2015, MSSP ACOs generated total program savings (inclusive of all savings and losses relative to financial benchmarks) of $429 million, the CMS said in August (166 HCDR, 8/26/16). However, MedPAC's data showed the $216 million loss the CMS took for the MSSP resulted from the agency paying providers $646 million for the savings they generated.

MedPAC's financial results for the ACO program are “incredibly unsatisfying,” Commissioner Craig Samitt, an executive vice president and chief clinical officer at Anthem Inc. in Indianapolis, said. Noting that some ACOs have generated savings for the Medicare program, Samitt urged MedPAC to research what’s driving savings at the most successful organizations.

Additional Reaction

Commissioner Willis Gradison, a former Republican House lawmaker and health insurance lobbyist, blamed the financial results on the fact that many ACOs are participating in one-sided (or savings only) risk models. The commission should develop recommendations that encourage more ACOs to take on two-sided risk (savings and losses), Gradison, who lives in McLean, Va., said.

In addition, it was wrong to create so many different ACO models, Gradison told the commission. The CMS shouldn't have allowed so many providers to participate while the models remained as demonstration, or test, projects, he said.

The MSSP model, along with another the Pioneer ACO demo, served 7.7 million beneficiaries in 2015. The MSSP model is much bigger, as the Pioneer program—which is designed for organizations with more experience in coordinating care—only serves 461,442 beneficiaries, according to an August fact sheet from the CMS.

Commissioners didn't vote on any recommendations during the ACO session.

MedPAC Chairman Francis J. Crosson said he's also disappointed with the progression of the ACO program to date. Some program modifications may be necessary, he said without specifying what changes the ACO may need to generate greater savings.

Crosson, of Palo Alto, Calif., is a former Kaiser Permanente executive.

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Brian Broderick at

For More Information

The ACO presentation prepared by MedPAC staff is at

The fact sheet is at

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