Medicare Shared Savings Program

Definition: The Medicare Shared Savings Program (Shared Savings Program or MSSP) is a program developed by CMS in 2012 that enables providers and suppliers of health care such as physicians and hospitals to set up an accountable care organization (ACO). The Shared Savings Program is a novel Medicare payment model which shifts away from the focus on volume-based reimbursement metrics and toward improved patient outcomes and increased value (value-based care). Under the MSSP, the ACO is charged with serving an assigned FFS Medicare beneficiary population, with a focus on improving patient outcomes while reducing cost of care. The Shared Savings Program holds ACOs accountable to certain standards while providing patient care, including quality, cost, and patient experience. These metrics are tied to the ACO’s reimbursement for services provided.¹

ACOs may elect to customize and take on varying levels of risk as they build out their own Shared Savings Program to meet their operational needs and the needs of the patient.² Plans can participate in a one-sided model in which they do not risk losing money; however, they are eligible for less shared savings. As the ACO’s participation level increases, the risk increases but the potential reward increases, as well. For example, if an ACO takes on the downside risk and does not meet its target savings, CMS will take money back from the ACO. However, if the ACO performs well and meets those targets, CMS will give the ACO bonus payments³. Plan options include:

• BASIC Track: Level A/B (one-sided model) to Level E (higher risk/reward)
• ENHANCED Track: Highest overall risk/reward

How it relates to ACO/PCMH: Since ACOs are the participatory organization in MSSP, PCMHs, in turn, play a pivotal role in improving outcomes and reducing costs under their ACO contracts. The shift from volume-based care to value-based care as well as increasing costs of pharmaceuticals—including not only overall spend but costs due to adverse drug events and nonadherence—has led many organizations to incorporate pharmacists into their action plans for MSSP. Pharmacists are well-positioned to help ACOs develop strategies for mitigating these costs while also improving outcomes with a goal of providing better care as well as utilizing the bonus payments to further improve patient outcomes. For example, pharmacists may design and implement programs to provide comprehensive medication management to address non-optimized medications, which cost the U.S. approximately $528 billion in 2016.⁴ So far, results from CMS have been promising. In fact, in 2019, MSSP saved a total of $1.19 billion (net) with reduced post-acute care spending, hospitalizations, and emergency department visits.⁵

Involved organizations/oversight: Centers for Medicare & Medicaid Services

Resources:

1. Shared Savings Program. Available at: www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/about
2. CMS. Shared Savings Program Participation Options for Performance Year 2022. Available at: www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/sharedsavingsprogram CMS. /Downloads/ssp-aco-participation-options.pdf
3. Advisory Board. What is the Medicare Shared Savings Program? Available at: www.youtube.com/watch?v=hGtjN7H07Bo
4. Watanabe JH, McInnis T. 275,000 lives lost and a $528 billion price tag. GTMR Institute, June 2019. Available at: https://gtmr.org/issue-brief-275000-lives-lost-and-a-528-billion-price-tag/
5. Verma S. 2019 Medicare Shared Savings Program ACO Performance: Lower costs and promising results under 'Pathways To Success.' Health Affairs; September 14, 2020. Available at: www.healthaffairs.org/do/10.1377/hblog20200914.598838/full/

Contributing authors:

Darren Mensch, PharmD, BCPS, BCACP
Clinical Pharmacist, Ambulatory Care—Population Health
Abington Jefferson Health

Daniel Spitz, PharmD candidate 2021
Jefferson College of Pharmacy

Last Updated 10/27/2020