The Results Are In – Medicare Shared Savings Program ACOs Are Reducing Costs and Improving Care

Under the Shared Savings Program, ACOs are offered two primary participation tracks, the BASIC Track and the ENHANCED Track. These tracks are based on varying levels of experience and readiness to assume financial risk. 

The Basic Track is designed to help newer or smaller ACOs gradually transition into a value-based care model with increasing levels of risk and reward. It features a “glide path” consisting of five levels that allow ACOs to start with a one-sided risk model and eventually move to a two-sided risk model. The first two levels operate under a one-sided shared savings arrangement, where ACOs can share in any cost savings they achieve without being liable for financial losses. This provides a low-risk entry point, allowing ACOs to build experience in managing costs and improving care quality without facing financial penalties. As ACOs progress, they transition into a two-sided risk model, where they can share in a larger portion of the savings but also assume responsibility for a percentage of any losses. By the last level, ACOs are fully accountable for both savings and losses.

The Enhanced Track is aimed at more experienced ACOs that are ready to assume full two-sided risk from the start. Under this model, ACOs share a larger portion of both savings and losses, which allows for potentially higher financial rewards but also requires them to be accountable for any cost overruns. This track is designed for ACOs with an established ability to manage patient populations, control spending, and deliver high-quality, coordinated care.

By offering both the Basic and Enhanced Tracks, MSSP enables ACOs to select the level of risk that matches their experience and resources, promoting a pathway toward full accountability and value-based payments. This flexibility and slower progression can incentivize ACOs that are interested in participating, but that need some time to ramp up their infrastructure and experience.

For home health consumers, particularly those managing chronic conditions, VBP emphasizes care coordination, ensuring that all aspects of their care—nursing, physical therapy, medication management—are integrated. This leads to fewer communication gaps between providers and a smoother healthcare experience. It also, according to the most recent HHVBP Model Annual Report, leads to lower hospitalization rates. 

Additionally, because VBP models reward providers for keeping patients healthy, consumers are more likely to receive timely care and interventions that help them stay at home longer, preventing costly hospital stays or nursing home placements. According to research, home health providers who operate under VBP models have demonstrated reduced costs for consumers while improving their overall health outcomes.

Ultimately, VBP enhances the home health experience by ensuring that care is both efficient and effective, with a strong focus on patient well-being and long-term health. We are also optimistic about the impact that value-based payment models can have on the home care industry, as that seems to be the next frontier of VBP.