Medicare Shared Saving Program Analysis

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Rising health care costs, a desire for increase access, and improvement in quality care, has the United States shifting focus to reform the health care delivery and payment systems. First there was pay for performance, then with the implementation of Affordable care act in 2010 began the payment reforms with concentration on care that was both quality based and cost effective. Emphasis was on decreasing thirty day readmissions for core measure diagnosis (Congestive Heart Failure, MI, and Pneumonia) and hospital acquired infections. Another measure was the implementation of the Medicare Saving Program and Accountable care organizations. Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, …show more content…
These companies fulfilled Medicare desire to shift health care from one of volume to one of value. The creation of Medicare Shared Saving Program (MSSP) for ACO began with the implementation of the Affordable Care Act in 2012, which called for saving program as a primary payment methodology. Shared savings, is not new, but was not widely used. It is a payment strategy that offers incentives for providers to reduce health care spending by offering them a percentage of any net savings as a result of their efforts. Interest on obtaining such incentives had providers responding by attempting to develop ACO even before program rules were released. The MSSP, based on the Physician Group Practice model, incorporates shared saving, with no financial penalties or downside risks for these groups other than unreimbursed services. Despite intent of program, some questioned Congress on including this model, and it’s adequacy to achieve delivery system transformation and possibility to for unearned bonus. The concern was that groups would participate, do nothing, and hope for favorable random outcome. The Shared Saving Model allows interested groups not willing to or enable in risk, the opportunity to form, develop and mature as ACO. Any concern for free loading can be addressed by requiring both proof of capability on participation and proof of compliance for payment. The program focuses on two payments streams, a traditional fee for service and targeted budget for managed population based on market baseline trend. The targeted budget has a set payment for each member per month with a mix of benchmarks and quality indicators to be met for quality improvement. Simply, if the fee for services comes under the targeted budget and providers

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