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ACO Shared Savings is Top Payer Partnership

Margaret Dick Tocknell, for HealthLeaders Media, June 6, 2013

Damore noted that "the government, which traditionally is more conservative than the private market, appears to be more progressive when it comes to shared savings, at least for now. We are starting to see things turn around, but to date, public payers have been the leaders when it comes to broad scale shared savings agreements."

Upside arrangements are unusual in commercial markets. Among the ACOs analyzed, only 21% of commercial arrangements offer upside shared savings. Those agreements tended to be smaller in scope, usually for 5,000 covered lives or less.

Almost 70% of commercial payment arrangements are either care management fees or shared savings downside models.

In exchange for the downside risk, however, commercial payers tend to be more generous than the Medicare program, offering savings splits that typically range between 50% and 80%. Medicare, in contrast, only offers a maximum of 60% of savings, although the assumed risk is comparable in the public and private market.

While there is very little capitation among either commercial or Medicare ACOs, that is expected to change said Damore. Capitated payments typically are paid on a periodic basis and are based on projected spending adjusted for risk. "Going forward," he said, "we'd expect that as payers and providers get more acclimated to accountable care, they will move more toward capitated arrangements."


Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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