How to Fix the Medicare Shared Savings Program

CHQPR May, 2018
Harold D. Miller

EXECUTIVE SUMMARY

Rather than generating savings as expected, the Medicare Shared Savings Program (MSSP) has created losses for the Medicare program for four years in a row.
Calculations by the Centers for Medicare and Medicaid Services (CMS) appear to show that ACOs with
downside risk produce higher savings than the “upside-only” ACOs. However, Medicare actually
spends more per beneficiary in the downside risk ACOs than in other ACOs, with no difference in
quality. Moreover, ACOs that have moved to the downside risk tracks have saved less after doing so.
The risk adjustment and benchmarking formulas used by CMS can penalize ACOs that serve
higher-need patients and patients living in rural areas. The greater savings attributed to downsiderisk
ACOs may...

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