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. Justlast 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
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."