The Medicare Shared Savings Program (MSSP) continues to meet its goals and to do what it was intended to do. In 2022, the Center for Medicare & Medicaid Services (CMS) recently announced that the Medicare Shared Savings Program saved $1.8 billion compared to spending targets for the year. That coupled with last year’s (2021) saving of $1.66 billion making it the sixth consecutive year of overall savings for the program. All this while continuing to support high-quality care and medical services. A press release from the CMS quoted Xavier Becerra, Secretary of Health and Human Services, as stating that “This program has delivered more than $1.8 billion in savings and delivered high-quality health care to millions of people. Just last month, we proposed ways to further grow and expand this successful program, especially in rural and other underserved communities.” CMS Administrator Chiquita Brooks-LaSure added that “The Medicare Shared Savings Program helps millions of people with Medicare experience coordinated health care while also reducing costs for the Medicare program. CMS will continue to improve the program, and it is exciting to see that Accountable Care Organizations are continuing to be successful in delivering coordinated, high-quality, affordable, equitable, person-centered care.”
What is the Medicare Shared Savings Program?
Medicare Shared Savings Program (MSSP) is an alternative payment model in which eligible providers, hospitals, and suppliers are rewarded for achieving better health for individuals, improving population health, and lowering growth in healthcare expenditures. The MSSP primary goal is to seek to provide high-quality, coordinated care to improve outcomes and reduce costs. This payment model was developed by the CMS in 2012 that enables providers and suppliers of healthcare to set up an accountable care organization (ACO). ACOs are groups of doctors, hospitals, and other healthcare providers who collaborate to provide coordinated high-quality care to people with Medicare. These ACOs are focused on delivering the right care at the right time while avoiding unnecessary services and medical errors. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it may be eligible to share in the savings it achieves for the Medicare program, also known as performance payments. This also drives lower health care costs for people with Medicare, who see lower out-of-pocket spending on avoidable health care utilization like emergency department visits because the ACO has better coordinated their care. Notable metrics provided by the CMS are:
- $416 in gross savings per beneficiary
- 78 percent of shared savings-only ACOs produced gross savings with an average savings rate of 2.4 percent
- 88 percent of at-risk ACOS produced gross savings with an average savings rate of 4.7 percent
- 304 out of 482, or 63 percent, of ACOs earned shared savings
- ACOs earned $2.5 billion in shared savings payments
The MSSP has grown steadily since it began in 2012 when only 220 ACOs existed. As of January 2023, 561 MSSP ACOs (which include over 573,000 clinicians) provided care to 10.5 million beneficiaries nationwide, according to the CMS. This growth is due, in part, to an increased awareness of the revenue-generating opportunities inherent in ACOs as well as a desire to avoid financial penalties under the Merit-based Incentive Payment System (MIPS). Physicians who participate in an advanced Alternative Payment Model such as a Next Generation ACO and meet certain parameters are exempt from MIPS reporting. A Next Generation ACO is similar to a traditional ACO; however, participants assume a higher level of financial risk.
ACOs agree to participate in the Shared Savings Program for a period of no less than five years, known as the agreement period and they must serve at least 5,000 clients. ACOs may participate in the Shared Savings Program for agreement periods under one of two tracks: the BASIC track (which includes a glide path for eligible ACOs), or the ENHANCED track, which offers the highest level of risk and potential reward. ACOs participating in the BASIC track’s glide path may begin under a one-sided model and progress through incremental levels (or Tracks) of increasing risk and potential reward. The MSSP provides participants with the following four ACO options; Track 1,Track 1+, Track 2 or Track 3. Currently, the one-sided risk option (i.e., Track 1) is the most popular with 82% of ACOs falling into this category, according to CMS. Ten percent of ACOs are in the Track 1+ model, one percent is in the Track 2 model, and seven percent are in the Track 3 model.
Eligible ACO providers and suppliers that may participate in the Shared Savings Program include:
- ACO professionals in group practice arrangements
- Networks of individual practices of ACO professionals
- Partnerships or joint venture arrangements between hospitals and ACO professionals
- Hospitals employing ACO professionals
- Critical Access Hospitals (CAHs) that bill under Method II
- Federally Qualified Health Centers (FQHCs)
- Rural Health Clinics (RHCs)
- Teaching hospitals that have elected to receive payment on a reasonable cost basis for the direct medical and surgical services of their physicians
As the industry continues to shift toward value-based payment models, the MSSP will likely continue to remain in the spotlight. By rewarding providers to improve outcomes and lower costs, the MSSP will gain even more traction in the coming years.