Physician and hospital networks known as accountable care organizations are saving Medicare big bucks, and greater savings could come from disease-specific programs.
The most recent cost-savings data for ACOs operating in the Shared Savings and Pioneer models showed overall gross savings for Medicare in 2016 of $713 million, almost twice as much as the previous year, a Centers for Medicare & Medicaid Services spokesperson told Bloomberg Law. One other ACO coordinates the work of end-stage renal disease providers. These in combination with a fourth ACO had a combined total gross Medicare savings of $836 million in 2016.
“Hospitals and physicians are continuing to join these models as they realize health care will eventually be paid on value-based payments,” David Muhlestein, chief research officer at Leavitt Partners LLC, a consulting firm in Salt Lake City, told Bloomberg Law. “Many ACOs are just starting to get used to the programs, therefore earning more savings.”
The increase in Medicare savings through ACOs appears to correlate with the steady increase of hospitals and doctors entering these networks. The number of networks in the shared savings program, the largest Medicare ACO program, increased from 220 in 2013 to 480 in 2017, a 118 percent boost. About 28 million people are covered under these networks.
“It takes a long time to build a successful ACO and a lot of capital,” Allison Brennan, vice president of policy at NAACOs, told Bloomberg Law.
The average cost for annual ACO operations was $1.6 million in 2015, according to a 2016 NAACOS survey of ACO participants, a heavy price tag for smaller and struggling hospitals.
Many ACOs are also planning to enter risk-based models, which give them the potential to earn more, but also potentially lose money, according to a study by Leavitt Partners and the National Association of ACOs (NAACOS) in Washington.
Read my full article here.
Stay on top of new developments in health law and regulation with a free trial to the Health Law Resource Center.
Learn more about Bloomberg Law and sign up for a free trial.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)