Medicare Shared Savings Program

Medicare Shared Savings Program
Name	Medicare Shared Savings Program
Formation	2012
Parent organization	Centers for Medicare & Medicaid Services
Jurisdiction	United States

Medicare Shared Savings Program The Medicare Shared Savings Program (MSSP) is a United States federal program established to encourage groups of healthcare providers to form Accountable Care Organizations that coordinate care for Medicare beneficiaries to improve quality and reduce costs. It links payment incentives to performance on cost and quality measures and interacts with several statutory authorities and regulatory initiatives across the United States Department of Health and Human Services, Centers for Medicare & Medicaid Services, Affordable Care Act, Medicare (United States program), and related healthcare delivery reforms. MSSP participates in broader efforts alongside programs such as the Bundled Payments for Care Improvement initiative, Hospital Readmissions Reduction Program, and Meaningful Use incentives.

Overview

MSSP creates opportunities for participating entities to share savings with the Centers for Medicare & Medicaid Services when spending for assigned Medicare (United States program) fee-for-service beneficiaries is below benchmark targets while meeting quality standards. Participants operate as Accountable Care Organizations that assume varying levels of financial risk and collaborate with hospitals, physician groups, and post-acute providers such as Skilled Nursing Facilitys and Home Health Agencys. The program’s metrics and contracts intersect with initiatives from the Department of Health and Human Services and influence policy debates in venues like the United States Congress and state health agencies.

History and Legislative Background

MSSP was created by the Patient Protection and Affordable Care Act in 2010 and was implemented by the Centers for Medicare & Medicaid Services in 2012, reflecting bipartisan interest in payment reform echoed in earlier proposals from the Institute of Medicine and pilot programs at institutions such as the Center for Medicare and Medicaid Innovation. Legislative oversight has involved committees including the United States Senate Committee on Finance and the United States House Committee on Ways and Means, with subsequent rulemaking via Federal Register notices and guidance from the Office of Inspector General (United States Department of Health and Human Services). Amendments and waivers affecting MSSP have appeared in legislative packages and regulatory updates influenced by stakeholders like the American Hospital Association, American Medical Association, and state hospital associations.

Program Structure and Eligibility

Eligibility to form an ACO under MSSP requires legal organization and governance structures that meet criteria set by the Centers for Medicare & Medicaid Services; eligible participants include physician group practices, hospitals, integrated delivery systems, and other provider organizations. ACOs must have sufficient numbers of assigned Medicare beneficiaries and meet requirements related to data sharing, beneficiary notification, and governance involving clinicians and management teams drawn from institutions such as academic medical centers like Johns Hopkins Hospital or community systems like Kaiser Permanente. Participation options include different tracks with varying downside risk; ACOs interact with other programs such as the Medicare Advantage market and state-level initiatives overseen by agencies like the Massachusetts Health Connector.

Payment Models and Financial Mechanisms

MSSP employs benchmark-based spending targets, shared savings rates, and risk corridors to determine payments, drawing upon actuarial methods used by organizations such as the American Academy of Actuaries. Payment models include one-sided and two-sided risk arrangements; two-sided models expose ACOs to shared losses, while one-sided models limit downside exposure. Financial reconciliation uses claims data from the Centers for Medicare & Medicaid Services and engages payment principles similar to those applied in programs like the Physician Quality Reporting System and Value-Based Purchasing. Benchmarks adjust for factors including regional spending patterns, beneficiary risk scores derived from models promoted by the National Committee for Quality Assurance, and updates linked to fee schedule changes overseen by the Centers for Medicare & Medicaid Services Innovation Center.

Performance Measurement and Quality Metrics

ACO performance is assessed using quality metrics across domains such as patient/caregiver experience, preventive health, care coordination, and at-risk population management. Measures rely on instruments and standards from entities including the Consumer Assessment of Healthcare Providers and Systems, National Quality Forum, and clinical guidelines from specialty societies like the American College of Physicians and American Heart Association. MSSP ties quality performance to shared savings eligibility and incorporates measures relevant to chronic conditions often managed in settings involving the American Diabetes Association and American Cancer Society. Public reporting of ACO performance aligns with transparency efforts by the Centers for Medicare & Medicaid Services and research on outcomes from academic centers like Harvard Medical School.

Impact and Criticism

Evaluations by researchers at institutions such as Harvard University, Dartmouth College, and the RAND Corporation have reported mixed effects on Medicare spending and quality, showing some ACOs achieved savings while others did not. Critics including advocacy groups and provider associations have highlighted concerns about benchmark methodology, potential incentives for patient selection, and consolidation effects that echo debates involving the Federal Trade Commission and Antitrust Division (United States Department of Justice). Supporters argue MSSP advances population health management and integration exemplified by models at organizations like Geisinger Health System and Mayo Clinic, while opponents cite studies questioning long-term sustainability and impacts on Medicare expenditures published by outlets such as the Congressional Budget Office.

Administration and Recent Developments

Administration of MSSP remains under the Centers for Medicare & Medicaid Services with operational support from the Innovation Center for model testing and rule changes promulgated through annual final rules in the Federal Register. Recent developments include updates to benchmarking, risk adjustment, and pathways to advanced ACO models influenced by demonstrations like the Next Generation ACO Model and policy shifts under administrations associated with leaders from the United States Department of Health and Human Services. Ongoing monitoring and scholarship from institutions such as Johns Hopkins Bloomberg School of Public Health and policy analysis by the Urban Institute continue to inform debate and proposed regulatory changes.

Category:Medicare programs