Test of Medicare Shared Savings Program Did Not Achieve Expectations
CMS' Physician Group Practice Demonstration -- the widely touted blueprint for the Medicare Shared Savings Program -- has failed to produce significant savings, the Washington Post reports.
About the Project
Launched in 2005, the project offered financial bonuses to 10 leading health systems that met performance targets for most of 32 quality measures and that spent at least 2% less on Medicare beneficiaries than nearby facilities.
All 10 participating systems met quality requirements for the five-year program, according to the Post. Furthermore, health experts and the 10 systems' leaders noted that the experiment fostered innovation in care.
However, despite quality improvements, an official evaluation of the project found that only four of the 10 systems decreased Medicare spending enough to qualify for a performance bonus in 2010.
Meanwhile, only two systems decreased Medicare spending enough to qualify for bonuses in all five years of the project, and three systems never qualified for bonuses, the Post reports.
According to some of the organizations' leaders, the rules for comparing Medicare costs to those at nearby facilities made it difficult to demonstrate savings. Policy experts also noted that demonstration patients appeared sicker on paper because the project incentivized submitting many billing codes.
Implications for Reform
Although the details differ, the "basic contours" of the PGP project and CMS' proposed rule for accountable care organizations are the same, the Post reports, noting that both programs offer shared savings for providers that achieve quality and efficiency goals.
Many health providers already have expressed concern over the proposed rule and have called it "burdensome," the Post reports (Goldstein, Washington Post, 6/1).
For example, the American Hospital Association sent a letter to CMS warning that hospitals' excitement about ACOs has "dwindled dramatically" since the proposed regulation was released (Reichard, CQ HealthBeat, 6/1).
Former CMS Administrator Gail Wilensky said the demonstration results indicate that the Medicare ACO project is not ready to be launched nationwide. Wilensky asked, "If it was this tough for this group that I had just assumed would be hands-down winners, what does it say for groups that don't have a long history of coming together?" She added that the experiment was less financially risky than the proposed rule because it did not penalize systems for overspending.
CMS Administrator Donald Berwick acknowledged that that savings from the project were "unevenly distributed" and "modest." However, he continues to express optimism about ACOs and noted that he is monitoring criticism of the proposed ACO rule (Washington Post, 6/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.