Inpatient Gainsharing as Part of a Medicare ACO

We have written about the distinction between shared savings (used in ACOs and Bundled Payments) and gainsharing 6 essential differences between gainsharing and shared savings programs:  Under shared savings, Medicare gives back a portion of the money it has saved through reduced payments to providers.  Gainsharing, on the other hand, is a tool that enables providers to respond to the challenge of cost reduction by becoming more efficient.  As many of our clients have pointed out, the AMS Gainsharing Program has proven to be an effective strategy to achieve the physician engagement that is critical to the success of an ACO.  They have told us that implementing an ACO requires profound change in the culture of health care institutions and provider practice:  To succeed over time, providers must make daily decisions based on efficiency and effectiveness, not on volume – of patients, procedures or services.  So gainsharing can provide the foundation of, and the stepping stone to, other initiatives, like an ACO.

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