ACOs Earn $3.1 Billion, Medicare Saves $2.1 Billion, Largest in History

The mainstay federal Accountable Care Organization (ACO) program, called the Medicare Shared Savings Program (SSP), provided Medicare with a savings of more than $2.1 billion in 2023. This is the largest savings the program has seen since it began over a decade ago. Further, two-thirds of these ACOs earned back more than $3.1 billion in shared savings.

The SSP is the longest running ACO from Medicare. It’s statutory, originating from the Affordable Care Act. It currently has approximately 11 million beneficiaries who are in traditional, fee-for-service Medicare. ACOs are comprised of hospitals, physicians, and other health care providers who work together to manage the care for a population of patients. The goal of the model is to provide high quality, cost-efficient care.

SSP risk tracks  

There are multiple options for SSP ACOs to select for risk tolerance and experience. The risk progression ranges from upside risk only in levels A – B to two-sided risk starting in levels C – E, then the enhanced track. 

In looking at the 2023 data (see table), the majority of ACOs, 302 or 67%, were in two-sided risk models, meaning they were eligible for both upside (shared savings) and downside (repayment) risk. Interestingly, more than 62% of all ACOs selected the two highest risk tracks — level E (123) and enhanced (160). The remaining 151 ACOs selected upside risk only via levels A or B. Of those in upside risk only, 42 were in their first ACO term, 12 were re-entering the program with the remaining 97 renewing. More than 10.235 million beneficiaries were assigned to these ACOs, averaging roughly 22,600 per ACO. 

SSP results

For performance year 2023, 69% of participating ACOs, or 313, achieved savings. Those savings ranged from $157,000 to more than $101 million. 

There were 120 ACOs with neither a gain nor a loss ($0) for 2023. This includes 70 ACOs with negative savings rates (i.e., losses) under their minimum loss ratio (MLR) threshold. Only 20 ACOs were over their MLR and resulted in losses or repayments. 

For those 313 ACOs earning shared savings, 73% or 228 ACOs, earned back less than $10 million. The remaining 27%, or 85 ACOs, had savings of $10 million and above. Of the 85 ACOs with more than $10 million in shared savings, the highest earned was more than $101 million. The average shared savings for all ACOs was slightly under $10 million per ACO. 

Savings by risk tract

Looking even further, low revenue ACOs fared well compared to their higher revenue counterparts. (see graph). For context, CMS has used the low-high revenue classification to generally represent physician-led ACOs versus larger or hospital-led ACOs that are high revenue.

Percent spending by setting

Anyone in or looking to get into value-based models like the SSP will need to pay close attention to their utilization rates and spend. Looking at the annualized, truncated, weighted mean total expenditures per assigned beneficiary person years in each ACO, it varied significantly from a low of $8,000 to over $41,000. However, sometimes the highest per capita amounts reflected ACOs focused on managing those in long-term care. Further, these ACOs were still successful in earning shared savings or were at $0 (no savings, no losses). 

When breaking these expenditures down by setting, the largest expenditures by percentage of total (33%) were in the Part B setting (physician and suppliers). When you add another 24% from the outpatient setting of hospital outpatient, rural health clinics, federally qualified health centers, dialysis, and others, it totals 57% in various outpatient/clinic settings. Since ACOs are generally designed to focus on primary care, this percentage makes sense.

The hospital inpatient setting — including acute care, critical access, psych, rehab — totaled 26%. Much less was spent in the post-acute setting with skilled nursing facilities (SNFs) at 6%, home health 4%, hospice 3%, and other (ambulance, durable medical equipment) at 4%. 

Specific to SNFs, the average length of stay for all ACOs was 26.75 days, with an average expenditure per stay of just over $15,000.

Provider participation

More than 750,000 providers or entity types were involved in this model as participating providers, broken down as follows: 

• 172,000 primary care physicians
• 243,000 nurse practitioners and physician assistants
• 327,000 physician specialists
• 1,928 hospitals with 991 acute and 937 critical access
• 4,727 federally qualified health centers
• 2,342 rural health clinics

ACO demographics

ACOs included more women than men with the aggregate female population at 57% or 5.8 million compared to 43% or 4.4 million men. For age brackets, close to 1 million individuals were under 64 and 1.2 million were 85 years or older. Most individuals, roughly 8.1 million, fell in the middle with 4.8 million between 65 – 74 and 3.3 million between 74 – 84 years. 

The majority of individuals were White at 87% or 8.9 million. Of the 1.28 million others, 587,000 were Black, 153,500 Asian, 102,000 Hispanic ,and 15,500 North American Native descent. There were approximately 425,000 who were either “other” or “unknown.” 

How CLA can help you interpret SSP metrics effectively

Interested in learning more about the SSP, bundled models like the forthcoming TEAM model, or simply better understanding what “value-based” means to your organization? We can help. Reach out today. 

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