Estimated Savings From the Medicare Shared Savings Program

This economic evaluation examines whether implementation of the Medicare Shared Savings Program was associated with net savings to the Centers for Medicare & Medicaid Services during performance years 2013 to 2021.


Introduction
The Medicare Shared Savings Program (MSSP) was launched in 2012 to improve efficiency and generate financial savings for the Centers for Medicare & Medicaid Services (CMS).Under the program, voluntarily constituted accountable care organizations (ACOs)-groups of clinicians, hospitals, and other institutional participants-face accountability for the total costs of care received by traditional Medicare beneficiaries.If medical spending is below a specific target (benchmark), ACOs are eligible for financial bonuses.For CMS to break even or achieve net savings for traditional Medicare beneficiaries in the MSSP, gross reductions in medical spending must equal or exceed

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Methods
Publicly reported data on the MSSP from April 1, 2012, to December 31, 2021, were used.This included information about ACOs' total expenditures, bonus payments, number of aligned beneficiaries, and hospital affiliation.Data on MA enrollment were obtained from the 2013 to 2021 regional variation public use files, 3 and information on the USPCC was obtained from the 2014 to 2021 MA rate calculation files. 4

Statistical Analysis
To estimate net savings of the MSSP in traditional Medicare, MSSP bonus payments overall and per aligned beneficiary were calculated for each performance year.Estimates of the impact of the MSSP were then extracted from 2 studies finding that the program was associated with reduced gross Net savings to traditional Medicare were calculated by taking the difference between MSSP bonus payments with gross reductions in medical spending.
The association between gross spending reductions from the MSSP and benchmark payments to MA plans was then assessed.The percentage spending reduction of the MSSP in a given performance year was multiplied by the share of traditional Medicare beneficiaries in the MSSP.The product of these quantities was then multiplied by the number of MA beneficiaries whose payment was linked to traditional Medicare spending and the average annual benchmark to estimate the effects on benchmarks in the following year.

Results
The

Discussion
Using frequently cited estimates of the impact of the MSSP, this study found that the MSSP was associated with net losses to traditional Medicare, net savings to MA, and overall net savings to CMS.
To our knowledge, this study is the first assessment of the net savings of the MSSP in traditional

Limitations
The study was limited by the lack of evaluations of the consequences of the MSSP for gross spending in performance years 2017 to 2021 and inherent challenges projecting effect estimates of the MSSP in light of heterogeneous treatment effects.Effect estimates of the MSSP between 2017 and 2021 may have been higher as a result of a greater duration of exposure to the program (eTable in Supplement 1) but may have been lower due to weaker performance among later entry cohorts. 1 The net impact of these countervailing effects is ambiguous.In addition, 2 of the study years overlapped with the COVID-19 pandemic.This may have affected outcomes from the MSSP by diverting health systems toward pandemic-related issues and away from ACO priorities (eg, care management and reducing low-value care). 5In addition, CMS mitigated shared losses to MSSP ACOs during the pandemic and made some changes to benchmarks on the basis of spending related to COVID-19.

QuestionFindings
Was the Medicare Shared Savings Program (MSSP) associated with net savings to the Centers for Medicare & Medicaid Services (CMS)?In this economic evaluation using estimates from 2 studies and data on MSSP incentive payments for MSSP performance years 2013 to 2021, the MSSP was associated with net losses to traditional Medicare, net savings to Medicare Advantage, and overall net savings to CMS.Meaning Despite potential savings, the total estimated budget effects of the MSSP to CMS were small.
medical spending: a study by McWilliams et al 1 published in 2018 (−$253.05per beneficiary per year for physician-affiliated ACOs; -$49.48 for hospital-affiliated ACOs) and a study by the Medicare Payment Advisory Commission (MedPAC) 2 published in 2019 (−$103.53per beneficiary per year overall).These estimates were applied across the 2013 to 2021 period (eMethods in Supplement 1).
Medicare after the COVID-19 pandemic and the first to assess the association of the MSSP with payment in MA.The finding that the MSSP was associated with net losses to traditional Medicare conflicts with other research that the MSSP was associated with net savings of approximately $250 million annually.1This difference is due to rising bonus payments to MSSP ACOs in the postpandemic period as well as the shift in MSSP beneficiaries toward hospital-aligned ACOs.Both increases in the share of traditional Medicare beneficiaries aligned to the MSSP and increases in the number of MA enrollees over the study period continued to net savings in MA.

Figure 2 .et al 1 )
Figure 2. Estimates of Net Savings From the Medicare Shared Savings Program 1500 Reductions in medical spending may also spill over to Medicare Advantage (MA) because MA benchmarks are based on spending in traditional Medicare.The effect of the MSSP on net savings to CMS depends on 3 important factors.First, in JAMA Health Forum.2023;4(12):e234449.doi:10.1001/jamahealthforum.2023.4449(Reprinted) December 15, 2023 1/6 Downloaded from jamanetwork.comby guest on 12/21/2023 the sum of bonus payments paid to ACOs.particularly after the COVID-19 pandemic, and no evaluations have assessed the association of the MSSP with payment in MA.In this economic evaluation, we combined prior estimates of the association between the MSSP and gross spending in traditional Medicare with estimates of bonus payments to MSSP ACOs and new projections of how these estimates impact payments to MA plans to evaluate net changes in CMS spending in the first 9 performance years of the MSSP.
MSSP bonus payment per beneficiary increased gradually between 2013 ($85) and 2019 ($112) before increasing sharply after the COVID-19 pandemic in 2020 ($215) and 2021 ($194) (Table).The share of hospital-aligned beneficiaries increased from 61.2% in 2013 to 69.3% in 2021, and the share of traditional Medicare beneficiaries attributed to the MSSP increased from 10.9% in 2013 to 32.8% Figure2) as the share of traditional Medicare beneficiaries in the MSSP (Table)and the number of MA enrollees increased (eg, 15.6 million in 2014 and 27.2 million in 2021).Savings from MSSP-related reductions to MA benchmarks totaled $4.923 billion over the study period based on estimates from McWilliams et al 1 (and $4.480 billion based on estimates from MedPAC 2 ).

Table .
Bonus Payments, Share of Beneficiaries Attributed to Hospitals, and Total Attributed Beneficiaries in the MSSP Figure 1.Estimates of the Reductions in Traditional Medical Spending and Incentive Payments per Beneficiary in the Medicare Shared Savings Program Summing net losses from traditional Medicare and savings from MA, the MSSP was associated with savings of $4.339 billion based on derived estimates from McWilliams et al 1 and $3.057 billion based on MedPAC-derived estimates. 2This represents approximately 0.075% of combined medical spending related to traditional Medicare and MA over the study period.