Fact Sheets

Medicare ACOs continue to succeed in improving care, lowering cost growth

Medicare ACOs continue to succeed in improving care, lowering cost growth (Updated November 7, 2014)
Pioneer ACO Model and Medicare Shared Savings Program ACOs show continued quality of care improvements and additional Medicare savings

The Centers for Medicare & Medicaid Services today issued quality and financial performance results showing that Medicare Accountable Care Organizations (ACOs) have successfully improved the quality of care for Medicare beneficiaries by fostering greater collaboration between doctors, hospitals, and health care providers to coordinate care for beneficiaries.

Last year, many ACOs had higher quality and better patient experience than published benchmarks. This year, compared to previous year performance, the ACOs improved significantly for almost all of the quality and patient experience measures demonstrating that these organizations improve care. ACOs in the Pioneer ACO Model and Medicare Shared Shavings Program (Shared Savings Program) also generated over $417 million in savings for Medicare. At the same time, ACOs qualified for shared savings payments of $460 million. The encouraging news comes from preliminary quality and financial results from the second year of performance for 23 Pioneer ACOs and the first year of performance for 220 Shared Savings Program ACOs.

Since passage of the Affordable Care Act, more than 360 Medicare ACOs have been established, serving over 5.6 million Americans with Medicare. Medicare ACOs are groups of providers and suppliers of services that work together to coordinate care for the Medicare fee-for-service (FFS) beneficiaries they serve and achieve program goals; Medicare ACOs choose a level of performance risk and receive financial incentives based on that choice and their quality performance. Pioneer ACOs tend to be more established, assume greater financial risk, and receive financial rewards for lowering costs.

Beneficiaries seeing health care providers in ACOs always have the freedom to choose doctors inside or outside of the ACO. Medicare shares with ACOs any savings generated from lowering the growth in health care costs when they meet performance standards for high quality care.

Pioneer Performance Year 2 Results
Pioneer ACOs showed improvements in three key areas: financial, quality of care, and patient experience.


  • During the second performance year, Pioneer ACOs generated estimated total model savings of over $96 million and at the same time qualified for shared savings payments of $68 million. They saved the Medicare Trust Funds approximately $41 million. The total model savings and other financial results are subject to revision.
  • Pioneer ACOs achieved lower per capita growth in spending for the Medicare program at 1.4 percent, which is about 0.45 percent lower than Medicare fee-for-service.
  • Eleven Pioneer ACOs earned shared savings, 3 generated shared losses, and 3 elected to defer reconciliation until after the completion of performance year three.

Quality of Care and Patient Experience:

  • The mean quality score among Pioneer ACOs increased by 19 percent, from 71.8 percent in 2012 to 85.2 percent in 2013.
  • The organizations showed improvements in 28 of the 33 quality measures and experienced average improvements of 14.8 percent across all quality measures. Some of these measures included controlling high blood pressure, screening for future fall risk, screening for tobacco use and cessation, and patient experience in health promotion and education..
  • The Pioneer ACOs improved the average performance score for patient and caregiver experience in 6 out of 7 measures. These results suggest that Medicare beneficiaries who obtain care from a provider participating in Pioneer ACOs report a positive patient and caregiver experience.

Medicare Shared Savings Program Performance Year 1 Results

  • 58 Shared Savings Program ACOs held spending $705 million below their targets and earned performance payments of more than $315 million as their share of program savings. One ACO in Track 2 overspent its target by $10 million and owed shared losses of $4 million. .  Total net savings to Medicare is about $383 million in shared savings, including repayment of losses for one Track 2 ACO.
  • An additional 60 ACOs reduced health costs compared to their benchmark, but did not qualify for shared savings, as they did not meet the minimum savings threshold.
  • Shared Savings Program ACOs improved on 30 of 33 quality measures. Quality improvement was shown in such measures as patients’ ratings of clinicians’ communication, beneficiaries’ rating of their doctor, health promotion and education, screening for tobacco use and cessation, and screening for high blood pressure.
  • Shared Savings Program ACOs achieved higher average performance rates on 17 of the 22 Group Practice Reporting Option Web Interface measures reported by other Medicare FFS providers reporting through this system.
  • In 2013 alone, over 125,000 eligible professionals who were ACO providers or suppliers qualified for their incentive payments for reporting their quality of care through the Physician Quality Reporting System (PQRS) These providers will also avoid the PQRS payment adjustment in 2015 because they demonstrated the ability to report quality measures through their ACO.

The Shared Savings Program continues to receive strong interest from applicants seeking to join the program starting in 2015. New participants will likely be announced in the end of 2014. 

Additional Resources
Pioneer ACO Model.   

Medicare Shared Savings Program.  

ACO quality measures Fact Sheet.