Accountable care organizations in Medicare’s permanent value-based care program are saving more than ever. But they’re looking for more tools from the government to boost their savings.
The Medicare Shared Savings Program saved $2.1 billion in 2023, the highest level since the program launched more than a decade ago and up 16.7% from last year, the Centers for Medicare and Medicaid Services announced in late October.
Related: ACO REACH savings report invigorates calls for extension
But participants are lauding a set of new policies tucked into the latest physician pay rule for 2025 that they say will help them save even more. Those include a prepaid shared savings option, plus a health equity benchmark adjustment to help ACOs in rural and underserved communities participating in the program.
Brian Fuller, managing director of consulting firm ATI Advisory’s value-based care design and delivery practice, said the sizable savings increase over last year has to do with a combination of participants’ growing knowledge and experience with driving results, program fixes that have partially corrected the “ratchet effect" on benchmarks, and program incentives that entice ACOs to take on financial downside risk sooner.
“The program is performing at its highest in its history,” Fuller said. “And there's so much maturation and experience there that there is a path forward. I think the question is, what's the path?”
About 9% of the program’s participants are producing double-digit savings rates, according to 2023 performance data released by CMS.
Lecanto, Florida-based Citrus ACO led the pack with a savings rate of 19.4%, with Stillwater, Minn.-based Bluestone ACO, Troy, Mich.-based USMM Accountable Care Partners ACO, and three ACOs associated with Bethesda, Md.-based Aledade in the top 10 performers.
Participation in the value-based payment program is growing, though it still hasn’t rebounded to the numbers MSSP boasted at the beginning of 2020. As of January, there were 480 Shared Savings Program ACOs, up 5.3% from January 2023. That’s still about 40 below the program’s total in 2020.
Participants that generated high levels of savings have a couple of common factors: They’ve focused heavily on primary care and have used technology to meet patients’ care needs faster.
That’s enabled ACOs such as Aledade’s Delaware ACO to improve their workflow efficiency and ensure they’re providing care at an early point so there’s a lower likelihood of rehospitalization or other costly care episodes down the line. Ahmed Haque, chief performance officer for Aledade, said Delaware’s work on these fronts allowed it to earn more in the Shared Savings Program than in traditional fee-for-service for the first time this year.
In short, many ACOs are already doing well in the program. But several changes are on the horizon tied to the uncertain future of the popular payment model ACO Realizing Equity, Access and Community Health, or ACO REACH, which is set to expire in 2026.
Participants in both the Shared Savings Program and ACO REACH are looking to preserve elements of REACH by working them into Medicare’s permanent ACO model. CMS acquiesced in this year’s pay rule by transferring an option to receive prepaid savings over from REACH, a change that will kick in Jan. 1. Stakeholders have also called for CMS to integrate other elements, such as REACH’s full-risk track, into the Shared Savings Program, so participants can continue on that risk level.
Haque and Sean Cavanaugh, Aledade’s chief policy officer, said the prepaid shared savings will help address a cash flow problem for participants. Access to those funds will alleviate a lag between when ACOs administer care, when they’re paid for it and when they’re able to start the budgeting process for the future.
“Our partner practices are not only medical practices, but they're also small businesses,” Haque said. “In order to succeed in value-based care, it's the work that you do today that perhaps pays you tomorrow. That's the concept of value-based care: You focus on prevention today, and once the clock stops at the end of the performance year, then nine months after that is when you get paid. And in order to succeed, you need to make certain investments in your practices.”
That will be particularly apparent among ACOs that focus on rural or underserved populations, said Deepak Sadagopan, chief operating officer of population health management for Renton, Wash.-based Providence.
Access to prepaid savings will also help participants make upfront investments in health equity and primary care that they might have been unable to do because of budgetary constraints, Sadagopan said.
For instance, Providence took four years to start generating savings, but 10 years into its participation, it’s one of the highest-saving ACOs in the Shared Savings Program, much of which stems from the health equity- and primary care-based infrastructure they laid down in their early years of the program.
That foundation now helps the health system address root causes more efficiently and prevent costlier care down the line, Sadagopan said.
But there’s still more that could be done to keep increasing participants’ success in the Shared Savings Program, including drawing more from ACO REACH, said Dr. Rajiv Patel, CEO of Bluestone Physician Services, which has locations in Florida, Minnesota and Wisconsin.
The biggest worry for physicians across the board is CMS' fifth consecutive round of payment cuts to doctors. Plus, the Shared Savings Program still requires that patients be seen by a physician before they can be attributed to an ACO, which is made more complicated by ongoing physician workforce shortages, Patel said.
“A large portion of our beneficiaries’ primary care providers are nurse practitioners or physician assistants, so this requirement creates logistical challenges, so some Medicare beneficiaries do not get the opportunity to be attributed to our ACO,” Patel said.
Patel said CMS should eliminate that requirement and improve its attribution steps to align them more closely with ACO REACH.
