The Centers for Medicare & Medicaid Services (CMS) announced today that Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program (Shared Savings Program) in 2020 earned performance payments (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.   

CMS Administrator Chiquita Brooks-LaSure

“Accountable Care Organizations are an Affordable Care Act success story,” said CMS Administrator Chiquita Brooks-LaSure. “The 2020 Shared Savings Program results continue to demonstrate the impact ACOs have in improving quality and lowering health care costs. The Biden-Harris Administration is committed to a health care system that delivers high quality, affordable, equitable, and person-centered care. CMS is similarly committed to moving health care providers to value-based payment and looks forward to partnering with the ACO community in a continued effort to advance these goals and promote affordability and sustainability.”

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,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “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.

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