Explaining the Medicare Shared Savings Program
September 19, 2022

Vytalize participates in the Centers for Medicare or Medicaid Services’ (CMS) Medicare Shared Savings Program (MSSP) as an Accountable Care Organization (ACO). This program prioritizes patient-centered networks across healthcare settings, including doctor’s offices, hospitals, and other care facilities, aligning financial and medical responsibilities to simultaneously improve patient care and limit unnecessary spending.  

When money is saved – called shared savings – everyone benefits.  

What is Shared Savings?

When an ACO reduces the total healthcare spending for its patients below a benchmark cost that Medicare sets, the provider or organization will be rewarded with a portion of the savings. This results in the payer spending less than they would have otherwise, and the provider/organization receives more revenue than they would have otherwise expected.

For example, if Medicare expects an ACO to spend $10 million on their Medicare beneficiaries in a calendar year, and they only spend $8 million on those patients instead, that generates $2 million in savings that is shared with Medicare, the ACO, and the providers in the ACO who cared for those patients.

 

Why is Shared Savings important?

Shared Savings is meant to help reduce waste in the healthcare system by encouraging doctors, facilities, and organizations to work together through care coordination. This helps reduce:  

  • Hospital admissions for conditions that could be treated in a patient’s usual doctor’s office  
  • Duplicate tests and procedures  
  • Costly health measures when there is an effective alternative  
  • Lengthy inpatient stays that can be managed just as effectively in a less costly care setting

Patients also benefit from this model:
  • Financially (lower medical costs)
  • Comfortability (treated by their Primary Care Provider or usual doctor, or even in the comfort of their home)
  • Preventively (doctors ensure patients receive routine screenings and schedule regular appointments that catch costly health conditions sooner)

Shared savings is a key element of value-based care, and why our ACO focuses on delivering the highest quality care at a lower cost. If you’re interested in partnering with Vytalize, contact us to learn more!