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CMS: ACOs Enrolled in Pathways to Success Program Saved Medicare Billions

Under the Pathways to Success program implemented by the Centers for Medicare & Medicaid Services (CMS) in 2018, accountable care organizations (ACOs) reported $1.19 billion in net savings to Medicare in 2019.

The federal program was created to incentivize ACOs and provider organizations to move from fee-for-service to value-based care models. In 2019, 541 ACOs participated in the program.

“This is also the third year in a row that the program has achieved net program savings,” explained CMS Administrator Seema Verma in a Health Affairs blog. “Consistent with prior years, ACOs with shared savings continued to reduce post-acute care spending, along with hospitalizations and emergency department visits.”

Ms Verma explained further that the ACOs enrolled in the program performed better than legacy track ACOs with net per-beneficiary savings of $169 per beneficiary compared to $106 per beneficiary for legacy track ACOs.

“Pathways to Success policies were intended to improve the accuracy of financial benchmarks, and strengthen the incentive for ACOs to sustainably drive down spending over the long-run through five-year participation agreement periods,” said Ms Verma, noting that many stakeholders were initially reluctant in regards to the program due to the risk providers would have to assume. “However, these early results suggest that greater financial accountability under the Pathways to Success policies has produced the stronger incentives for ACOs to deliver better coordinated and more efficient care for Medicare beneficiaries.”

Data show that both legacy track and new ACOs that took on downside risk saw more savings than those that did not take responsibility of the additional costs.

“We have seen strong interest from eligible ACOs in electing these options for 2021. We look forward to resuming our annual application cycle next spring for ACOs to apply and renew their participation under Pathways to Success policies for a January 1, 2022 start date,” said Ms Verma. —Edan Stanley

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