CMS Deputy Administrator Jon Blum said last Thursday that the agency expects to double the number of ACOs operating in Medicare by the end of this year. That would put the total number of Medicare ACOs at about 130 by January.
Assume 130 Medicare ACOs at 15,000 bennies each on average. That’s about 2 million lives, or about 4% of the 48 million Medicare beneficiaries. Presumably the ACO beneficiaries generate a little less than 4% of Medicare spending, since the 28% of Medicare members who are in Medicare Advantage still generate an average per capita payment that is greater than Medicare FFS.
If the ACOs generate average savings of 10%, and they get at least half of the savings back in performance bonuses, that’s a net savings to CMS of 5% or less after savings are shared, for less than 4% of Medicare spending. That will bend the curve by less than 2/10%. That’s not revolutionary.
In three years, when the savings target is reset at a level that includes some of the ACO’s prior savings, CMS will capture all of those prior savings, and share only incremental savings. That would bend the curve a bit more if all the ACOs continue to play, but which ACOs are going to stay in the game when the renewal benchmark wipes out much of their hard-earned savings?