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CMS announces that ACO pilot program saved more than $380 million last year



February 03, 2014
Area(s) of Interest: Payor Issues and Reimbursement 

Declaring that its pilot accountable care organization (ACO) program was “off to a good start,” the Centers for Medicare & Medicaid Services (CMS) announced last week that the savings from Pioneer and Medicare shared savings ACOs “far exceeded $380 million” in its first year.


U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius said, the “findings demonstrate that organizations of various sizes and structures across the country are working with their physicians and engaging with patients to better coordinate and deliver high quality care while reducing expenditure growth.”


While ACOs are designed to achieve savings over several years, not on an annual basis, the interim financial results released for the Medicare Shared Savings Program show that, in the first 12 months, nearly half (54 out of 114) of the ACOs that started program operations in 2012 already had lower than projected expenditures. Of the 54 ACOs that exceeded their benchmarks in the first 12 months, 29 generated shared savings totaling more than $126 million. Final year-one performance results will be released later this year.


An independent preliminary evaluation of the Pioneer ACO Model – the ACO model designed for more experienced organizations prepared to take on greater financial risk – also released yesterday shows Pioneer ACOs generated gross savings of $147 million in the first year. Results showed that of the 23 Pioneer ACOs, nine had significantly lower spending growth relative to Medicare fee-for-service while exceeding quality reporting requirements.


To learn more about the Medicare Shared Savings Program, click here.


To learn more about Pioneer ACOs, visit http://innovation.cms.gov/initiatives/Pioneer-ACO-Model/index.html.

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