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Highlights of the 2020 Medicare ACO Program Results 

Medicare accountable care organizations (ACOs) continued their trend of increasing savings each year in 2020, generating $4.1 billion in gross savings and $1.9 billion after accounting for shared savings payments. As shown in Graphic 1 below, 2020 was the best year ever for the Medicare Shared Savings Program (MSSP), which is the largest alternative payment model offered by the Centers for Medicare & Medicaid Services (CMS), serving 10.6 million patients in 2020. When including savings through 2019 from the Next Generation (Next Gen) ACO Model, the Center for Medicare & Medicaid Innovation Center (Innovation Center) program comprising some of the leading 

 

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TOTAL ACO SAVINGS 

Since 2012, ACOs have saved Medicare $12.6 billion in gross savings and $4.4 billion in net savings.


ACOs in the country, along with a now expired Pioneer ACO Model, ACOs have saved Medicare $12.6 billion in gross savings and $4.4 in net savings. NAACOS expects another record year from Next Gen ACOs when 2020 performance results are published. Importantly, data show these ACOs continued to provide high-quality care and yield satisfied patients.

In 2020, 513 ACOs participated in the MSSP, which is a voluntary model. Today, ACOs care for nearly 20 percent of all Medicare patients and nearly a third of traditional Medicare patients. This document includes highlights of the 2020 MSSP results, which are based on public CMS data related to financial benchmarks and quality scores. 

 
Graphic 1: Total gross and net savings generated to Medicare from the Shared Savings Program Net savings are after accounting for shared savings payments and shared loss payments. ACOs get better with time

Key Findings from the 2020 MSSP ACO Results

  • 2020 was the fourth straight year MSSP ACOs delivered net savings to Medicare.
  • MSSP ACOs generated $4.145 billion in savings compared to their benchmarks, which are CMS-set financial targets, recording their best year yet.
  • 83 percent of ACOs saved Medicare money in 2020, also a program high
  • MSSP ACOs generated an average savings of $390 per patient compared to their benchmarks, which is a major improvement over the $262 per patient generated in 2019, the previous annual high.
  • MSSP ACOs received an average quality score of 97.8 percent, a new program best.
  • ACOs earned $2.3 billion in shared savings payments, an average of $6.6 million each in 2020.
  • Just six MSSP ACOs would have paid shared losses if CMS had not waived doing so, citing the COVID-19 Public Health Emergency.
  • Because MSSP benchmarks are adjusted to account for both national and regional spending trends in the performance year, ACOs’ benchmarks dropped in 2020, meaning providers had to lower spending to generate savings. MSSP’s record savings in 2020 is because ACOs still managed care better than providers across the nation and their regions.
 

Key terms

Gross Savings: The difference between ACOs’ benchmark, or CMS-set financial targets, and actual spending.

Net Savings: Money returned to CMS after accounting for shared savings payments, shared loss payments, and discounts.

 
  • As we’ve seen in years past, more experienced ACOs have done better at saving Medicare money. Table 1 below shows the percent of ACOs that earned shared savings by their start year.
  • 80 percent of ACOs who started in 2012, 2013, or 2014 earned shared savings in 2020, compared to 59 percent of ACOs who started in 2018, 2019, or 2020. This illustrates the long-term commitment required by ACOs and that success doesn’t happen overnight but take years of hard work.
  • 97 percent of ACOs who started in 2012, 2013, or 2014 generated savings for Medicare in 2020 and none would have owed shared losses. Comparatively, 76 percent of ACOs who started in 2018, 2019, or 2020 generated savings for Medicare in 2020 and four would have owed shared losses.
  • ACOs that started in in 2012 or 2013 and earned shared savings netted an average of $7.6 million each to the Medicare Trust Fund, compared to $4.6 million each for ACOs that started in 2019 or 2020.
 

How Do ACOs Use Shared Savings?

ACOs must tell CMS how they plan to use their shared savings. CMS analyzed the distributions of ACOs who generated shared savings from 2013 to 2017 and shared the top ways ACOs use savings:

  • Supporting ACO physicians and hospitals (56 percent)
  • Investing in ACO infrastructure (23 percent)
  • Investing in care redesign (18 percent)

 

Table 1: The percent of ACOs that earned shared savings by their start year

Start Year

Number of ACOs

PY

2013

PY 2014

PY 2015

PY 2016

PY 2017

PY 2018

PY 2019

PY 2020

2012

39

28%

35%

42%

42%

49%

57%

78%

85%

2013

32

19%

25%

37%

36%

42%

61%

84%

72%

2014

52

N/A

18%

21%

36%

43%

47%

61%

83%

2015

59

N/A

N/A

21%

26%

28%

23%

35%

58%

2016

47

N/A

N/A

N/A

18%

28%

42%

57%

66%

2017

58

N/A

N/A

N/A

N/A

21%

33%

56%

83%

2018

108

N/A

N/A

N/A

N/A

N/A

21%

36%

52%

2019

65

N/A

N/A

N/A

N/A

N/A

N/A

41%

63%

2020

53

N/A

N/A

N/A

N/A

N/A

N/A

N/A

68%

 

  • The number of ACOs saving the Medicare Trust Fund money has increased every year since 2015, when roughly half of ACOs saved Medicare money.
  • 83 percent of ACOs saved Medicare money in 2020, and 67 percent saved enough to earn shared savings, as shown in Graphic 2. Both of these numbers are new highs for MSSP. 

Graphic 2: The percent of ACOs that generated savings and earned shared savings

 

Quality continues to improve

  • MSSP ACOs received an average quality score of 97.8 percent, a new program high.
  • 60 ACOs recorded a perfect score of 100.
  • 26 ACOs had 38 percent or more African American, Latinx, or Asian beneficiaries. These diverse ACOs had an average quality score of 97.6 compared to 97.8 for less diverse ACOs.

ACOs are saving money for Medicare regardless of various ACO distinctions

As shown in the table above, ACOs save more money, both for Medicare and themselves, the longer they participate in a total cost of care ACO model. The focus on whole-person care, managing cost, and quality for the full year and developing population health infrastructure drives this continued success. While time in the program is one way to examine ACOs, there are other ACO distinctions and characteristics to consider. Despite the ability to cut the performance data by many different ACO categorizations our analysis of the data showed:

  • ACOs in both shared savings-only and shared risk models/tracks had hundreds of dollars per person in gross and net savings
  • ACOs categorized by CMS as “high revenue” and “low revenue” had hundreds of dollars per person in gross and net savings.

Conclusion
Data from 2020 show ACOs continue to save Medicare money and improve quality and outcomes in the process. As the CMS administrator said, there should be no doubt that ACOs are succeeding. Despite the need to expand upon MSSP’s success, the number of ACOs in 2021 fell to its lowest total since 2017, the year before CMS enacted its Pathways to Success polices. NAACOS continues to express concern at this decline in ACO participation and offered several recommendations in a letter to the CMS administrator on ways to reverse that decline. NAACOS continues to advocate for passage of the Value in Health Care Act, which would both incentivize ACO participation and create more equitable policies for existing ACOs. Policymakers should look for opportunities to grow ACO participation so that benefits of the program can spread to more patients, while helping solve Medicare’s looming insolvency issues.