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(ACO) regulations - American Society of Anesthesiologists

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CMS-1345-P 356<br />

prevailing per-capita expenditure growth in their service area that is higher than the national<br />

average overshadows their hard-fought efficiency gains.<br />

b. Detailed Stochastic Modeling Results<br />

Table 11 shows the distribution <strong>of</strong> the estimated net financial impact for the 5,000<br />

stochastically generated trials. (The amounts shown are in millions, with negative net impacts<br />

representing Medicare savings). The net impact is defined as the total cost <strong>of</strong> shared savings<br />

less-- (1) any amount <strong>of</strong> savings generated by reductions in actual expenditures; and (2) any<br />

losses collected for <strong>ACO</strong>s that accepted risk and have actual expenditures exceeding their<br />

benchmark.<br />

The median estimate <strong>of</strong> the Shared Savings Program financial impact for calendar years<br />

2012 through 2014 is a net savings <strong>of</strong> $510 million. This amount represents the "best estimate"<br />

<strong>of</strong> the 3-year financial impact <strong>of</strong> the Shared Savings Program initiative. It is important to note,<br />

however, the relatively wide range <strong>of</strong> possible outcomes. Overall, 97 percent <strong>of</strong> the stochastic<br />

trials resulted in net program savings, and the other 3 percent represented cost increases. The<br />

10 th and 90 th percentiles <strong>of</strong> the estimated distribution show net savings <strong>of</strong> $960 million and $170<br />

million, respectively, suggesting a 10 percent likelihood that the actual impact would fall outside<br />

respective percentile amounts. In the extreme scenarios, the results were as large as $2 billion in<br />

savings or $270 million in costs.<br />

Our Office <strong>of</strong> the Actuary (OACT) prepared the stochastic model and resulting financial<br />

estimates. OACT believes that the median result <strong>of</strong> $510 million in savings is a reasonable<br />

"point estimate" <strong>of</strong> the impact <strong>of</strong> the Shared Savings Program provision in current law, as it<br />

would be implemented through this proposed rule. However, OACT emphasizes the possibility<br />

<strong>of</strong> outcomes that differ substantially from the median estimate, as illustrated by the estimate

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