Image of male nurse pushing senior woman in a wheelchair in nursing facility

An independent analysis from consulting firm Avalere finds the Medicare Shared Savings Program has underperformed when compared to the government’s own cost-saving predictions, raising questions about the long-term financial success of Medicare’s largest alternative payment model.

 The shared savings program grew from 27 accountable care organization participants in 2012 to 561 in 2018. Most of those ACOs continue to select the upside-only Track 1. It does not require participants to repay the Centers for Medicare & Medicaid Services for spending above their target.

 According to the Avalere research released Thursday, ACO net savings have fallen more than $2 billion short of initial Congressional Budget Office projections made in 2010. Instead, the shared saving programs increased federal spending by $384 million over that same period.

“The Medicare ACO program has not achieved the savings that the CBO predicted because most ACOs have chosen the bonus-only model,” said Josh Seidman, senior vice president at Avalere.

While the MSSP overall was a net cost to CMS in 2016, the analysis suggests individual ACO performance may improve with experience in the program. Avalere found that MSSP ACOs in their fourth performance year produce net savings to the federal budget, totaling $152 million. These results suggest that the CBO’s initial projections “may not have taken into account the time it takes for ACOs to gain experience with the program and to start to produce consistent savings,” Avalere said in a press release.