Medicare Shared Savings Program Accountable Care Organizations Have Shown Potential for Reducing Spending and Improving Quality

Medicare spending is expected to grow to $1.4 trillion by 2027. To control this increase and promote quality and healthy populations, the Centers for Medicare & Medicaid Services (CMS) has implemented and is considering a number of alternative payment models that reward providers for the quality and value of services. The goal is to incentivize providers to keep patients healthy and thus lower costs. The Medicare Shared Savings Program is one of the largest alternative payment models. As part of this program, health care providers form Accountable Care Organizations (ACOs) to coordinate care to reduce Medicare costs and improve quality of care. Information about the extent to which ACOs are able to reduce Medicare spending and improve quality is critical to inform future developments as ACOs and other alternative payment models evolve.