The Medicare Shared Savings Program: A “Great Experiment”

While the Centers for Medicare & Medicaid Services (CMS) lauded the latest interim financial results for the Medicare Shared Savings Program (MSSP) for Accountable Care Organizations (ACO) as “promising,” those who have firsthand knowledge say there is much room for improvement in the MSSP. Under this program, ACOs share with Medicare any savings generated from lowering the growth in health care costs while meeting standards for high quality care. The interim financials released on January 30, showed that in their first 12 months, nearly half (54 out of 114) of the ACOs that started program operations in 2012 already had lower expenditures than projected. Of the 54 ACOs that exceeded their benchmarks in the first 12 months, 29 generated shared savings totaling more than $126 million.

Only one ACO in North Carolina, Triad Health Care Network, exceeded the threshold to achieve shared savings. The actual numbers for individual ACOs involved in the MSSP have not been released yet.

“We learned a lot,” said Steve Neorr, vice president and executive director of Triad Health Care Network in Greensboro. “We learned what we need to do better. MSSP is a great experience and a great experiment.”

Even those like Neorr, whose organization has thus far benefitted from the program, are critical of particular elements such as the five quality metrics that require 100 percent compliance. “That’s just not possible,” he said.

While it’s generally agreed that the MSSP is flawed, several of the largest ACOs in North Carolina remain optimistic and positive about the fledgling program although they did achieve savings but did not exceed the threshold to  qualify for shared savings. They also hope CMS can correct the problem issues.

“The transition to delivering accountable care from our current volume-based health care delivery system is hard work, but it is necessary,” said Grace Terrell, MD, and the CEO of Cornerstone Health Care in High Point. Cornerstone did not achieve shared savings this time around. “The Medicare Shared Savings Program is an early stage program that will continue to evolve over time. Cornerstone’s first-year experience shows our quality improved and our overall costs are substantially lower than the majority in the MSSP. With that information we will continue to improve our processes and work with all of our payers to improve our outcomes and anticipate financial success as a result. We are playing the long game, not the short one.”

Another ACO, Coastal Carolina Health Care, also did not exceed the threshold to achieve shared savings, but remains optimistic about the program. In fact, the U.S. Department of Health and Human Services quoted Kenneth W. Wilkins, MD, president of Coastal Carolina Health Care, in their press release despite the fact that his ACO did not benefit this period from MSSP.

“Our experience has shown that ACOs can increase quality while lowering costs. As a result of the programs we’ve initiated, our patients have experienced better access to their primary care physician, higher quality measures, and fewer trips to the hospital,” Wilkins said.   “We look forward to making continued progress and seeing future results, and we are grateful to CMS whose advance funding made these initiatives possible.” 

Even though the cost went down and quality of care improved at both Cornerstone and Coastal Carolina, the issue was that the cost benchmarks were very low to begin with.

The initial investment to make the transformation to a physician-led accountable care organization is substantial. The National Association of ACOs (NAACOS) says that the 114 MSSP ACOs included in the interim report have invested over $400 million so far to build and operate their ACOs. Many won’t receive a return on their investment this year and may well struggle to stay in the program over time.

NAACOS and ACOs like Cornerstone have outlined several ways the CMS can improve the MSSP and make it more of a viable alternative, including:

  • Changing the way patients are attributed to the ACO and bring stability to the population the ACO is serving,
  • Improving the formula for setting the benchmarks and how savings are determined,
  • Account for the fact that in some communities the costs of care are well below the national average, and for them, it is even more difficult to achieve savings,
  • Increasing the clinical and claims data ACOs receive to improve care,
  • Recognize that quality of care varies from community to community and while achieving a uniform high standard of care is the goal, in the interim, allow for regional differences and allow ACOs to receive savings if their overall quality of care is improved.
  • Allowing risk adjustment formula to reflect changes in health status for continuously assigned beneficiaries
  • Changing the quality benchmark thresholds to allow full credit when an ACO doesn’t achieve a threshold but does increase from the year before (build improvement into the metrics)
  • Providing for enrollment to establish a direct patient engagement experience for the beneficiary with the ACO
 
 

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