Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Custom Media Event: ESG Summit
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Transformation Summit
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain Revenue Cycle
    • - Hospital at Home
    • - Workplace of the Future
    • - Virtual Health
    • - Future of Healthcare Staffing
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
September 11, 2018 01:00 AM

CMS underestimated Medicare ACOs' savings

Maria Castellucci
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The Medicare Shared Savings Program generated $1.84 billion in savings over three years, which is nearly twice the savings that CMS data show, according to a new study commissioned by the National Association of ACOs.

    The study, published Tuesday, also found accountable care organizations reduced Medicare spending by $542 million after accounting for shared savings by the ACOs from 2013 to 2015. This contradicts data from the CMS that ACOs actually increased Medicare spending by $344 million over the time period.

    The study is the latest in a series that find Medicare ACOs are saving more money than CMS' methodology shows. Just last week the New England Journal of Medicine published an analysis with similar results. ACO analysts argue the CMS consistently underestimates savings because it's using a benchmarking methodology, which only compares ACO performance over the years to calculate savings.

    Researchers argue the best way to analyze ACO savings is to compare their spending to Medicare beneficiaries not in ACOs, also called a difference-in-differences regression analysis.

    The CMS likely doesn't conduct such analyses for the Medicare Shared Savings Program because it's not required to, said David Muhlestein, chief research officer at Leavitt Partners. Difference-in-differences analyses have been conducted for the Next Generation ACO and Pioneer ACO programs because they both originated from the CMS Innovation Center and are therefore mandated, he added.

    But the lack of analysis by the CMS has caused some confusion about how much money Medicare ACOs are actually saving the agency.

    "I think there is a growing understanding that you can't simply look at performance against the benchmarks as the definitive indication of how much savings are being generated and there are now academic studies finding that the magnitude of the savings tends to be higher," said Dr. Farzad Mostashari, CEO and co-founder of the ACO consultancy Aledade.

    There are also greater stakes to understanding how much Medicare ACOs are saving as the CMS proposes to force more ACOs to take on risk faster, arguing the program isn't bringing down spending quickly enough. Many ACOs say they will leave the program if they are forced to take on risk before they are ready.

    In the most recent study, conducted by consultancy Dobson DaVanzo & Associates on behalf of the National Association of ACOs, the spending by ACO-attributed Medicare beneficiaries was compared to non-ACO Medicare beneficiaries. The study uses claims data for 100% of ACO-attributed beneficiaries and 83% to 94% of non-ACO beneficiaries depending on the performance year.

    The results were slightly different than previous studies that also use a difference-in-differences estimation methodology to calculate Medicare ACO savings, but Muhlestein said that is to be expected since researchers pick different characteristics to establish the control group, or group of non-ACO beneficiaries. The studies often conclude Medicare ACO savings are greater than estimated by the CMS.

    "We hope that the study is going to change the narrative, and the narrative out there has been ACOs that don't take on risk don't save money, in fact they probably lose money. And that is not true," said Robert Mechanic, executive director of the Institute for Accountable Care who consulted with Dobson DaVanzo & Associates on the methodology for the study.

    Muhlestein said that although ACOs are saving money, the savings "are still very small, and they are not bending the cost curve." Using the findings from Dobson and taking into account the overall spending on Medicare ACO beneficiaries over the three-year study period, the Medicare ACOs only generated a net savings of 0.3%, he said.

    But Mostashari argues that even though the savings are small they are still savings. "What is the alternative again? What program saves more? Because I'm still looking for it."

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    medicare and money
    Inspector General pushes CMS to recover $226M in Medicare overpayments
    Ezike 800.jpg
    Former Illinois health chief Ezike under scrutiny by state's top ethics investigator
    Sponsored Content
    Modern Healthcare Alert: Sign up for this breaking news email to be kept in the loop as urgent healthcare business news unfolds.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Transformation Summit
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain Revenue Cycle
        • - Hospital at Home
        • - Workplace of the Future
        • - Virtual Health
        • - Future of Healthcare Staffing
      • Custom Media Event: ESG Summit
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing