Commercial Insurers Less Likely to Offer ACOs 'Upside-Only' Shared-Savings Arrangements, Study Finds

Commercial insurers participating in accountable care arrangements are less likely than Medicare to use payment models featuring the “upside-only” shared savings preferred by providers, according to an analysis released Wednesday by the Premier healthcare alliance.

Premier's study of 85 ACO payer arrangements showed that more than one-third of these are for upside-only shared savings—where savings are split evenly between insurers and providers and there are no penalties imposed for failing to meet goals. But of these upside models, only 21% are offered by commercial payers; more than half are through the Medicare Shared Savings Program or Medicare Advantage.

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Source: Modern Healthcare

A Premier official criticized commercial insurers for not doing more upside-only payment arrangements. Upside-only options are more attractive to providers, particularly in the early years of an ACO, because they allow providers to test care delivery models without the fear of financial losses while also offering the opportunity to earn enough in shared savings to offset ACO development costs.