Dive Brief:
- The Medicare Shared Savings Program, a value-based care purchasing initiative that aims to link provider payments to cost and quality, was associated with net losses in the traditional Medicare program, according to a study published in JAMA Health Forum. However, the program yielded savings to Medicare Advantage and the CMS overall.
- The MSSP was linked to estimated losses between $584 million and $1.4 billion to traditional Medicare during performance years 2013 to 2021. But MA saved between $4.5 billion and $4.9 billion due to benchmark reductions related to the program, according to the study.
- The results demonstrate “important tensions” in the CMS’ voluntary accountable care models, including the challenge of setting incentives that can be derailed by unexpected events like the COVID-19 pandemic, researchers wrote.
Dive Insight:
Under the MSSP, accountable care organizations — groups of healthcare providers like physicians and hospitals — work to provide coordinated care and avoid unnecessary services, medical errors and avoidable utilization to cut spending. If spending is below a certain target, ACOs can receive financial bonuses.
But for the CMS to break even or reach net savings in traditional Medicare, cuts in medical spending must equal or exceed how much it spends on bonus payments sent to ACOs, the study noted.
Spending reductions also affect MA, as benchmarks that help set payments to the private plans are determined by traditional Medicare spending. Across both traditional Medicare and MA, the MSSP was linked to savings between $3.1 billion and $4.3 billion for performance years 2013 to 2021, the study found.
The latest findings conflict with other studies that have shown net savings to the insurance program geared toward seniors, researchers noted.
The difference comes from rising bonus payments in the wake of the pandemic as well as a shift toward hospital-affiliated ACOs, which tend not to generate medical spending reductions as much as physician-only organizations.
The bonus payment per beneficiary increased more gradually between 2013 and 2019, from $85 to $112, the study found. But that payment spiked during the pandemic, reaching $215 in 2020 and $194 in 2021.
There are more hospital-aligned beneficiaries too, increasing from 61.2% in 2013 to 69.3% in 2021.
Meanwhile, increases in the share of traditional Medicare beneficiaries involved with the MSSP — from 10.9% in 2013 to 32.8% in 2021 — and a boost in the number of people enrolled in MA helped to net savings for the private program, the study found.
“Generating savings in traditional Medicare requires finely tuned incentives that are sufficiently generous to encourage participation but sufficiently strict to generate savings,” researchers wrote. “This is hard to accomplish over the long term and susceptible to unexpected events (like COVID-19) that undermine benchmark-setting assumptions.”
This summer, the CMS announced that the MSSP had saved Medicare $1.8 billion in 2022, with about 63% of participating organizations earning payments for performance last year.
Organizations in the program include more than 573,000 clinicians who care for almost 11 million people as of January 2023, the CMS said. The agency wants even more seniors in traditional Medicare to be part of an accountable care relationship, setting a goal of 100% participation by 2030.
