Medicare Shared Savings Program

Definition: The Medicare Shared Savings Program (Shared Savings Program or MSSP) is a program developed by CMS in 2012 that enables providers and suppliers of health care such as physicians and hospitals to set up an accountable care organization (ACO). The Shared Savings Program is a novel Medicare payment model that shifts away from the focus on volume-based reimbursement metrics and toward improved patient outcomes and increased value (value-based care).

Under the MSSP, the ACO is charged with serving an assigned fee-for-service (FFS) Medicare beneficiary population with a focus on improving patient outcomes while reducing cost of care. The Shared Savings Program holds ACOs accountable to certain standards while providing patient care, including quality, cost, and patient experience. These metrics are tied to the ACO’s reimbursement for services provided.¹

ACOs may elect to customize and take on varying levels of risk as they build out their own Shared Savings Program to meet their operational needs and the needs of the patient.² Plans can participate in a one-sided model in which they do not risk losing money; however, they are eligible for less shared savings. As the ACO’s participation level increases, the risk increases but the potential reward increases as well. For example, if an ACO takes on the downside risk and does not meet its target savings, CMS will take money back from the ACO. However, if the ACO performs well and meets those targets, CMS will give the ACO bonus payments.³

Plan options include:

• BASIC Track: Level A/B (one-sided model) to Level E (higher risk/reward)
• ENHANCED Track: Highest overall risk/reward

How it relates to ACO/PCMH: Since ACOs are the participatory organization in the MSSP, PCMHs, in turn, play a pivotal role in improving outcomes and reducing costs under their ACO contracts. The shift from volume-based care to value-based care as well as increasing costs of pharmaceuticals—including not only overall spend, but costs due to adverse drug events and nonadherence—has led many organizations to incorporate pharmacists into their action plans for MSSP.

Pharmacists are well-positioned to help ACOs develop strategies for mitigating these costs while also improving outcomes with a goal of providing better care as well as utilizing the bonus payments to further improve patient outcomes. For example, pharmacists may design and implement programs to provide comprehensive medication management to address non-optimized medications, which cost the United States approximately $528 billion in 2016.⁴

so far, results from CMS have been promising. In fact, in 2022, MSSP saved Medicare a net total of $1.8 billion, marking the sixth straight year of savings, and 63% of the ACOs achieved shared savings.⁵

Involved organizations/oversight: CMS

Resources

1. CMS. About the program. Baltimore: CMS. Available at: www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/about .
2. CMS. Shared Savings Program participation options for Performance Year 2024. Baltimore: CMS. Available at: www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/ssp-aco-participation-options.pdf .
3. Advisory Board. What is the Medicare Shared Savings Program? San Bruno, CA: YouTube. Available at: www.youtube.com/watch?v=hGtjN7H07Bo .
4. Watanabe JH, McInnis T. 275,000 lives lost and a $528 billion price tag. GTMR Institute. Available at: https://gtmr.org/issue-brief-275000-lives-lost-and-a-528-billion-price-tag/ .
5. Hagland M. CMS announces MSSP savings from 2022. Nashville: Healthcare Innovation. Available at: www.hcinnovationgroup.com/policy-value-based-care/accountable-care-organizations-acos/article/53070388/cms-announces-mssp-savings-from-2022 .

Contributing authors:

Darren Mensch,
PharmD, BCPS, BCACP Clinical Pharmacist,
Ambulatory Care – Population Health, Abington Jefferson Health

Daniel Spitz,
PharmD Candidate ‘21, Jefferson College of Pharmacy

Last reviewed and updated December 22, 2023, by Darren Mensch, PharmD