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New Affordable Care Act tools and Payment Models Deliver $372 Million In Savings, Improve Care

September 18, 2014

The Centers for Medicare & Medicaid Services (CMS) today issued quality and financial performance results showing that Medicare Accountable Care Organizations (ACOs) have improved patient care and produced hundreds of millions of dollars in savings for the program.

In addition to providing more Americans with access to quality, affordable health care, the Affordable Care Act encourages doctors, hospitals and other health care providers to work together to better coordinate care and keep people healthy rather than treat them when they are sick, which also helps to reduce health care costs. ACOs are one example of the innovative ways to improve care and reduce costs.  In an ACO, providers who join these groups become eligible to share savings with Medicare when they deliver that care more efficiently. 

ACOs in the Medicare Shared Savings Program (Shared Savings Program) and Pioneer ACO Model generated over $372 million in total program savings for Medicare ACOs.  The encouraging news comes from preliminary quality and financial results from the second year of performance for 23 Pioneer ACOs, and final results from the first year of performance for 220 Shared Savings Program ACOs. 

 Meanwhile, the ACOs outperformed published benchmarks for quality and patient experience last year and improved significantly on almost all measures of quality and patient experience this year. (Please see the accompanying fact sheet for additional details.)

 “We all have a stake in improving the quality of care we receive, while spending our dollars more wisely,” Health and Human Services Secretary Sylvia M. Burwell said.  “It’s good for businesses, for our middle class, and for our country's global competitiveness.  That’s why at HHS we are committed to partnering across sectors to make progress.”

Mercy ACO is one of the ACOs eligible to share in savings. “Mercy ACO realized a cost savings of $9.03 million for Medicare and, as a result, our organization will recoup $4.43 million of our $6 million investment in establishing this ACO,” said Dr. David Swieskowski, senior vice president & chief accountable care officer at Mercy Medical Center – Des Moines. “These results – which were made possible by the dedicated efforts of participating physicians and staff –  confirm our belief that getting patients healthy and keeping them healthy does have a direct impact on the cost of health care in our community.”

Since passage of the Affordable Care Act, more than 360 Medicare ACOs have been established in 47 states, serving over 5.6 million Americans with Medicare.  Medicare ACOs are groups of providers and suppliers of services that work together to coordinate care for the Medicare fee-for-service (FFS) beneficiaries they serve and achieve program goals.

Additional Resources

Visit the Medicare Shared Savings Program website to learn more about the program, and for information on ACOs and ACO participants including available financial and quality performance results for ACOs.

HHS Press Release: New Affordable Care Act tools and payment models deliver $372 million in savings, improve care

Fact Sheet: Medicare ACOs continue to succeed in improving care, lowering cost growth

Fact Sheet: Delivering Better Care at Lower Cost

Secretary’s Blog: Getting More Out of Every Dollar: Improving Health Delivery in America


About Centers for Medicare & Medicaid Services (CMS)

The Centers for Medicare & Medicaid Services, CMS, is part of the Department of Health and Human Services (HHS).