Medicare Shared Savings Program Achieves $2.1B Savings in 2023
The Centers for Medicare & Medicaid Services (CMS) recently announced a remarkable achievement for the Medicare Shared Savings Program (MSSP): net savings of $2.1 billion in 2023. This success underscores the growing impact of value-based care models in driving efficiencies and improving health outcomes. As one of the largest value-based care initiatives in the United States, the MSSP continues to set a high bar for cost containment and quality improvement in healthcare.
This milestone not only highlights the program's effectiveness but also reinforces the importance of accountable care organizations (ACOs) in reshaping the delivery of care.
A Closer Look at the Medicare Shared Savings Program
The MSSP was established in 2012 as part of the Affordable Care Act (ACA). Its primary goal is to encourage healthcare providers to form ACOs, groups of doctors, hospitals, and other healthcare providers that voluntarily come together to provide coordinated, high-quality care to Medicare beneficiaries. By focusing on preventive care, reducing redundant services, and avoiding medical errors, ACOs aim to lower healthcare costs while maintaining or improving patient outcomes.
Under the MSSP, ACOs can share in the savings they generate for Medicare, provided they meet specific cost and quality benchmarks. This structure creates powerful incentives for providers to innovate, collaborate, and deliver patient-centered care.
Breaking Down the $2.1 Billion Savings
The net savings achieved by the MSSP in 2023 represents the difference between actual Medicare spending and the projected spending if traditional fee-for-service (FFS) models were used. These savings are not just a testament to the program’s operational success but also to the ability of ACOs to meet stringent benchmarks.
Key Drivers of the Savings:
Enhanced Care Coordination: ACOs have focused on improving communication among providers, ensuring that patients receive timely and appropriate care.
Preventive Services: Increased emphasis on preventive measures, such as routine screenings and vaccinations, has helped avoid costly emergency interventions.
Data-Driven Decisions: The use of advanced analytics has enabled ACOs to identify at-risk patients and intervene before complications arise.
Chronic Disease Management: ACOs have prioritized managing chronic conditions such as diabetes and heart disease, reducing hospital admissions and readmissions.
The Role of Technology and Interoperability
Technology has been a crucial enabler of the MSSP’s success. From electronic health records (EHRs) to advanced predictive analytics tools with AI for healthcare, ACOs are leveraging digital tools to optimize care delivery. The integration of interoperable systems allows for seamless data exchange, which is essential for comprehensive patient care.
Key Technological Contributions:
Risk Stratification: Computer assisted coding tools for identifying high-risk patients help prioritize resources effectively.
Remote Monitoring: Devices and apps enable real-time tracking of patient health metrics, reducing the need for in-person visits.
FHIR Standards: Interoperability standards like FHIR (Fast Healthcare Interoperability Resources) have facilitated better data sharing across care teams, improving decision-making.
Quality Outcomes and Patient Impact
While cost savings are a significant achievement, the MSSP’s success is also measured by its impact on care quality. ACOs must meet rigorous quality standards to qualify for shared savings, ensuring that cost reductions do not come at the expense of patient care.
Notable Quality Improvements:
Increased use of preventive screenings and wellness visits.
Enhanced patient satisfaction scores due to more personalized and coordinated care.
Reduced hospital readmission rates, indicating better management of chronic conditions.
Patients benefit directly from the MSSP’s focus on value-based care. By receiving care that is not only cost-efficient but also higher in quality, beneficiaries experience improved health outcomes and a better overall care experience.
Challenges and Opportunities Ahead
With CMS aiming for 100% of beneficiaries to be in value-based arrangements by 2030, the MSSP faces important work ahead, including overcoming participation barriers for smaller practices, addressing data silos, and aligning incentives to ensure its future growth and sustainability.
These include:
Participation Barriers: Smaller practices may struggle to join or remain in the program due to financial or administrative burdens.
Data Silos: While interoperability has improved, many organizations still face challenges in sharing and accessing data seamlessly.
Alignment of Incentives: Ensuring that all stakeholders—patients, providers, and payers—are equally incentivized remains a complex task.
However, these challenges also present opportunities for innovation. Policymakers and industry stakeholders can build on the MSSP’s achievements by addressing these hurdles. Initiatives such as enhanced funding for small practices, expanded use of health information exchanges (HIEs), and refined risk adjustment methodologies can further strengthen the program.
The Bigger Picture: Accelerating the Shift to Value-Based Care
The MSSP’s success in 2023 is part of a broader trend toward value-based care in the United States. By aligning financial incentives with patient outcomes, value-based models aim to create a more sustainable and effective healthcare system. The $2.1 billion savings figure not only validates this approach but also serves as a benchmark for other programs and organizations.
Implications for Policymakers:
Scaling Successful Models: Lessons learned from the MSSP can inform the design and expansion of other value-based care initiatives.
Policy Support: Continued support for value-based care models through legislation and funding is essential to sustaining momentum.
Implications for Providers:
Invest in Innovation: Providers must embrace technological and process innovations like risk adjustment software to thrive in value-based models.
Collaborate Across Silos: Strong partnerships across the care continuum are vital for achieving shared savings and quality goals.
Looking Ahead
The $2.1 billion in net savings achieved by the MSSP in 2023 is a testament to the power of value-based care. By fostering collaboration, leveraging technology, and focusing on patient outcomes, the program has demonstrated that cost containment and quality improvement can go hand in hand.
As healthcare continues to evolve, the MSSP serves as a blueprint for what is possible when providers, payers, and policymakers work together toward a common goal. The challenge now is to build on this success, addressing barriers and scaling innovations to ensure that value-based care becomes the standard—not the exception—in American healthcare.
If you’re a risk bearing ACO looking to succeed in the transformation to value-based care delivery models, ForeSee Medical is a specialized software platform for accurate Medicare risk adjustment. Through proprietary clinical algorithms and natural language processing, ForeSee Medical optimizes HCC coding, empowering providers to positively influence health outcomes.
Blog by: The ForeSee Medical Team