The Shared Savings Program is a voluntary program that encourages hospitals and healthcare professionals to join an accountable care organization (ACO). ACOs deliver high quality care to Medicare enrollees at reduced costs.

The Medicare Shared Savings Program lets hospitals, doctors, and other healthcare professionals create or join an accountable care organization (ACO). An ACO’s goal is to provide coordinated, high quality healthcare to Medicare enrollees while reducing the cost of their care.

According to the U.S. Department of Health and Human Services, the Medicare Shared Savings Program saved Medicare more than $1.8 billion in 2022 while continuing to deliver value and high quality healthcare to Medicare enrollees.

Under this program, ACOs that meet healthcare quality and cost savings goals may receive a portion of the savings they helped generate for Medicare. However, ACOs that do not meet quality and savings goals may be responsible for some of the losses.

As of January 2023, ACOs in the United States include over 573,000 participating clinicians who provide care to almost 11 million Medicare beneficiaries, according to the U.S. Department of Health and Human Services.

This article takes a closer look at the Medicare Shared Savings Program, including participation, eligibility, and benefits.

Hospitals and healthcare providers participate in the Medicare Shared Savings Program voluntarily. ACOs can include different combinations of healthcare professionals, such as hospitals, doctors, specialists, and group practices.

To participate in the Shared Savings Program, Medicare-enrolled professionals must create or join an existing ACO. New ACOs must apply and be accepted to the Shared Savings Program.

ACOs can choose between one of two tracks, each with a different level of financial risk and reward. To be eligible for the program, ACOs must:

  • be a legally recognized entity under state law
  • sign a participation agreement with the Centers for Medicare & Medicaid Services (CMS)
  • have at least 5,000 Medicare enrollees
  • agree to publicly report financial and quality performance results
  • participate in the program for at least 5 years
  • not participate in other Medicare savings programs

There are two ways Medicare enrollees can join an ACO:

  • You can visit the Medicare website and choose a primary doctor who participates in an ACO.
  • CMS can automatically assign you to an ACO if you predominantly receive care from providers affiliated with that ACO.

If your doctor already participates in an ACO, you’ll get a letter that lets you know your healthcare professional is working with the ACO.

You’ll still have the same coverage and benefits that you receive through Original Medicare (parts A and B), including the ability to visit any Medicare professional of your choice and the option to switch healthcare professionals at any time.

In addition to cost savings, what other benefits do ACOs provide Medicare enrollees?

ACOs are responsible for coordinating care across multiple providers, which can improve your healthcare treatment and outcomes. For example, coordinated care from ACOs can:

  • eliminate redundant tests and services
  • prevent medical errors
  • ensure your medical information is shared across all providers to deliver more effective care

Medicare savings programs and the Medicare Shared Savings Program have similar names and are both intended to reduce costs, but they are very different programs.

Medicare savings programs are run by state Medicaid agencies. They’re intended to cover out-of-pocket Medicare costs for people with limited resources.

There are four different programs that you can apply for:

  • Qualified Medicare Beneficiary (QMB) program: helps pay for Part A and B premiums, deductibles, coinsurance, and copayments (for Medicare-covered health services)
  • Specified Low-Income Medicare Beneficiary (SLMB) program: helps pay for Part B premiums (you need Part A and Part B to qualify)
  • Qualifying Individual (QI) program: helps pay for Part B premiums (you need both Part A and Part B to qualify)
  • Qualified Disabled Working Individual (QDWI) program: helps pay for the Part A premiums.

Medicare savings programs are available through your state. When you apply, your state determines which programs you qualify for. In most cases, to qualify for a Medicare savings program, your income and resources must be below a certain limit.

To apply, contact the Medicaid agency in your state. You can use this online tool to locate the Medicaid agency in your state.

The Medicare Shared Savings Program is a value-based healthcare model designed by the CMS.

The program encourages doctors, hospitals, and other healthcare providers to form or join ACOs, and it rewards ACOs that meet specific quality and cost targets.

Healthcare professionals who participate in ACOs are financially motivated to focus on:

  • coordinated care (to avoid redundancies)
  • improved management of medical information
  • preventive care
  • better health outcomes
  • lower costs