RISE summarizes recent headlines that have an impact on Medicare, Medicare Advantage, and Medicaid.

ACOs saved Medicare nearly $2B in Shared Savings Program in 2020

The Centers for Medicare & Medicaid Services (CMS) announced this week that accountable care organizations (ACOs) participating in the Medicare Shared Savings Program in 2020 earned performance payments or shared savings totaling nearly $2.3 billion while saving Medicare approximately $1.9 billion, marking the fourth consecutive year of net savings for Medicare.

The Shared Savings Program, established by the Affordable Care Act, promotes accountability for patient populations and fosters coordination of items and services under Medicare Parts A and B. It also encourages investment in infrastructure and redesigned care processes for high quality and efficient health care service delivery. ACOs work to reduce fragmentation in patient care and cost by giving providers the incentives and tools to deliver high-quality, coordinated, team-based care that proactively promotes improved health for all patients. Currently, over 12.1 million Medicare fee-for-service beneficiaries receive care from a health care provider participating in a Medicare ACO.  

“Accountable care organizations are an Affordable Care Act success story,” said CMS Administrator Chiquita Brooks-LaSure in the announcement. “The 2020 Shared Savings Program results continue to demonstrate the impact ACOs have in improving quality and lowering health care costs.”

Shared Savings Program ACOs are groups of doctors, hospitals, and other health care providers, who join together voluntarily to give coordinated high-quality care to Medicare beneficiaries and ensure that people receive the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO may be eligible to share in the savings it achieves for the Medicare program. In certain instances, an ACO may owe a portion of losses if it increases costs or does not meet certain quality metrics.

“We have heard from ACOs that their work to coordinate care and improve quality enabled them to better respond to the COVID-19 pandemic,” Meena Seshamani, M.D., Ph.D., CMS deputy administrator and director of the Center for Medicare, said in the announcement. “They were able to work quickly to transition to telehealth and continue to provide needed access to care, and they were able to provide the team-based services needed to address the full spectrum of issues arising from the pandemic, ranging from community prevention and health-related social needs to end-of-life support for patients and their families.”

In all, 67 percent of Shared Savings Program ACOs shared savings with CMS in PY 2020. Eighty-eight percent of two-sided model (potential for shared savings or losses) ACOs earned shared savings payments, and 55 percent of one-sided model (potential for shared savings only) ACOs earned shared savings payments.

In addition to the savings, ACOs also hit an average quality score of 97.8 percent and 60 ACOs earned a perfect score of 100, according to the National Association of ACOs (NAACOS).

The encouraging data “underscores the need for policymakers to do all they can to grow the ACO model and extend the program’s benefits to more patients," said Clif Gaus, Sc.D., president, and CEO of the NAACOS, in an announcement. "We currently have the fewest number of Shared Savings Program ACOs since 2017. That trend must be reversed, given continued debate about ways to improve our health system." In 2020, 513 ACOs voluntarily participated in the Shared Savings Program.

In addition to the positive 2020 results, NAACOS said that multiple analyses have shown ACOs are lowering Medicare spending by 1 percent to 2 percent, which translates into tens of billions of dollars of reduced Medicare spending when compounded annually. 

CMS to MA plans: Ease up on prior authorization amid COVID-19

CMS is encouraging Medicare Advantage plans to waive or relax plan prior authorization requirements to help allow the transfer of patients from general acute care hospitals to post-acute care and other clinically appropriate settings, including skilled nursing facilities, long-term care hospitals, inpatient rehabilitation facilities, and home health agencies.

In guidance sent to organizations on August 20, CMS reminded MA organizations that they may waive or relax plan prior authorization requirements at any time to facilitate access to services even absent a disaster or public health emergency but the waiver must be uniformly applied to enrollees in similar situations.

“The ability of hospitals to transfer patients to appropriate levels of care without unnecessary delays or administrative burdens is critical to ensuring that hospitals have open acute-care beds to treat patients requiring emergent care,” the guidance said.

Unvaccinated COVID-19 hospitalizations cost U.S. health system more than $2B

A new report from the Kaiser Family Foundation found that as of early August 2021, 28 percent of adults over the age of 19 in the United States remain unvaccinated for COVID-19. As a result of these lagging vaccinations and the surge of the infectious delta variant, COVID-19 cases, hospitalizations, and deaths are on the rise again. Indeed, the analysis determined that vaccinations could have prevented 100,000 COVID-19 hospitalizations in June and July of this year. Those hospitalizations cost the U.S.  health system more than $2 billion.

The analysis is available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

Researchers analyzed data from the Centers for Disease Control and Prevention (CDC) to find there were 37,000 preventable COVID-19 hospitalizations in June and another 76,000 preventable COVID-19 hospitalizations in July, among unvaccinated adults in the U.S. If each of these preventable hospitalizations cost roughly $20,000, on average, that would mean these largely avoidable hospitalizations have already cost the U.S. health system billions of dollars since the beginning of June.