The 2018 OPEN MINDS Medicare ACO Update: A Four-Year Trends Report
Accountable care organizations (ACOs) were originally developed as a Medicare construct as part of the Patient Protection and Affordable Care Act (PPACA) of 2010 to improve care coordination and lower the cost of care. The first Medicare ACO intiative was implemented in 2012. ACOs are groups of provider organizations—such as physicians and hospital systems—that form an agreement to coordinate care for a set group of consumers. If the ACO delivers high quality care— measured through performance metrics—and lowers the cost of providing care against a baseline, then the provider organizations receive a portion of the savings generated. The longer an ACO participates, the more likely they are to receive a higher percentage of savings.
Accountable care organizations can exist alongside all payment structures (fee-for-service and managed care delivery systems) and payers (Medicare, Medicaid, commercial). There are four characteristics that all ACOs share:
- A strong primary care focus within an integrated system
- A defined patient population
- A value-based reimbursement mechanism with defined performance metrics
- The ability to “plug in” to other care coordination models—meaning PCMHs, health homes, etc.
Four Medicare ACO models have been developed since its inception:
- Medicare Shared Savings Program (MSSP)
- Next Generation ACO model
- Advanced Payment/Investment ACO model
- Pioneer ACO model (ended in December 2016)
In 2016, 14.7% of the Medicare population were enrolled in a Medicare ACO with over 600 Medicare ACOs in the U.S. The number of ACOs have increased overall more than 300% since 2012 when the programs first started. Increases year-over-year range between 13-17% between 2015 and 2018. And, the dominant contracting model has been Medicare Shared Savings Program
This report provides an in-depth look at Medicare ACOs – from the evolution of Medicare ACOs and the models for financing, to a look at the changes in Medicare ACO enrollment since 2012, to the changing number of Medicare ACOs over time and their characteristics, including:
- Number of participating ACOs
- Savings generated
- Number of attributed beneficiaries