Decrease in Medicare ACOs Largely Driven by Consolidation

June 16th, 2015

In contrast to the 13 ACOs that very publicly left the Pioneer program, 27 participants have quietly disappeared from the Medicare Shared Savings Program (MSSP). Research by Leavitt Partners has found that while some of these MSSP ACOs have indeed left the program, most of the “missing ACOs” are the result of mergers with other ACOs.

The MSSP was authorized by the 2010 Affordable Care Act (ACA). While the bulk of the ACA focused on increasing access to health insurance, the ACO program, administered by the Centers for Medicare and Medicaid Services (CMS), was included as one means to improve the delivery of care. In particular, the legislation called for the creation of ACOs that would allow health care providers to bear risk for defined populations with the responsibility to lower the cost of care while improving quality.

Initially there was significant interest in the program with 27 organizations joining in April 2012 and another 87 joining in July. The third round of participants, starting in January 2013 had 106 new entrants followed by 123 at the beginning of 2014. Most recently, 89 ACOS began in 2015, bringing the total number of ACOs to 432. However, CMS’s most recent data only include 405 participants. This has raised the question as to what has happened to the missing ACOs. We were able to learn what happened to 19 of these 27 ACOs.  For the remaining eight ACOs we left phone and email messages with the organization but did not receive a response.

The most common reason for an ACO to go missing was mergers. One reason for ACOs to merge was to retain sufficient beneficiaries. One of the fixed requirements to participate in the MSSP is to have a minimum of 5,000 Medicare beneficiaries attributed to the ACO based on where the beneficiaries receive a majority of their primary care. Some of these ACOs struggled with maintaining that minimum and found it easier to merge with another ACO. Another reason for ACOs to merge is that they came to realize that they did not have the necessary infrastructure to support their ongoing goals.

These mergers could take a couple of different forms. In one case the organization that created an ACO was subsumed by another organization operating an ACO. CMS even included a specific provision within the recently released final rule to handle issues associated with this scenario. In most cases, though, the individual provider practices were combined as part of the ACO but continued to operate independently for non-Medicare patients.

A final reason for ACOs to merge is that single organizations were operating separate ACOs and decided to combine the programs into a single ACO. This occurred when the same organization had created multiple ACOs in separate rounds of the MSSP and then decided to consolidate operations into a single ACO entity.

There are also some ACOs that did simply drop out of the program. In some cases the ACO reported that they had partnered with another organization and that the partnership did not work out and they were forced to abandon the program. In other cases the ACOs left the program because they were not able to accomplish their goals. While this is the exception, it represents a likely reality that not all provider groups will be able to successfully make the transition toward value-based care models.

The ACOs that have left the program are taking different paths forward. One of these is looking to rejoin the MSSP next year with a new partner. Others are continuing to work with commercial payers in a separate relationships. Another has completely disbanded, but the individual participating physicians who were a part of the ACO were able to join with another ACO.

ACOs are a work in progress. The MSSP ACOs are continuing to experiment with ways to manage populations and are gradually learning what works and what does not. Simultaneously, CMS is learning from early results and adjusting the MSSP to further the goals of lowering costs and raising quality. By and large providers in the MSSP are committed to the ideals of accountable care, but as we are learning, initial attempts are not always successful. As organizations experiment with new models they will continue to reevaluate their approaches, including partnering with other providers and, in a few cases, abandoning certain models completely.

Breakdown of Medicare ACOs No Longer in Program


Number of ACOs

Percent of ACOs




Dropped Out



No Response




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