The Medicare Shared Savings Program (MSSP) has been committed to better care for individuals, better health for populations, and lowering the growth of expenditures since its inception in 2012. Accountable Care Organizations (ACOs) target these goals of the MSSP by providing high quality care and creating gross savings that come from the difference between where CMS would have expected an ACO’s average beneficiary expenditures to be—based on historical expenditures, regional and national expenditure trends, and changes in population risk over time—and where the actual average expenditures landed for that ACO’s population of beneficiaries. ACOs are rewarded for their success in the program by sharing in a portion of the gross savings with CMS. ACOs can increase their gross savings by either increasing their benchmark, decreasing their expenditures, or both. To help ACOs better understand what goes into calculating their benchmark and expenditures, Wakely has prepared this brief to break down the component parts of gross savings.
