Summary

Description

According to analysis reported in Statistical Uncertainty in the Medicare Shared Savings Program published in Volume 2, Issue 4 of the Medicare and Medicaid Research Review, the role of random fluctuations in year-to-year healthcare spending may play a larger role in savings measurement than previously anticipated. Although CMS is fairly well protected from the chance that an Accountable Care Organization (ACO) would be rewarded inappropriately for savings that did not truly occur, ACOs are much less protected from the analogous chance that they are inappropriately denied rewards for savings that do occur. Smaller ACOs are especially vulnerable to the chance of being inappropriately denied credit for achieved savings. The article concludes with a discussion of strategies that can be used to anticipate and minimize the role of chance variation in ACO savings measurement.