CMS underestimated Medicare ACOs' savings

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. Just last 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 regression analysis. 

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. 

Go to top