Medicare awarded $138M to these Philly-area groups for spending less and hitting healthcare quality targets

Philadelphia-area physician organizations collected almost $138 million in bonuses last year for delivering quality care that saved Medicare money, according to new federal data.

For the second year in a row, the best performer was a group of private physicians with clinics in Philadelphia’s western suburbs. The group is a so-called Accountable Care Organization (ACO) affiliated with Aledade, a national company based in Maryland that helps independent primary-care doctors manage Medicare patients.

Top-performing Aledade Accountable Care 15 LLC is among 13 local ACOs that participated in the Medicare Shared Savings Program, which is designed to lower costs and improve quality of care for millions of Americans who get healthcare through traditional Medicare.

Doctors’ groups can earn bonuses if they meet cost and quality benchmarks in preventive care, chronic disease management, patient experience, and other areas.

The 13 local ACOs collectively covered 256,000 people. Some involve independent physicians’ groups; others are affiliated with the region’s health systems.

Nationwide, 477 ACOs had 10.3 million patients and earned $4.1 billion in performance bonuses. This saved Medicare $2.4 billion compared to cost benchmarks.

The Shared Savings Program covers far fewer people than the 34.1 million in private Medicare Advantage plans, but the two programs have the similar goals of managing patients’ care to save money and improve quality.

Local ACOs earned $137.6 million in bonuses.

Aledade Accountable Care 15 had the highest savings rate, at 16.6%, and earned a bonus of $33 million, while serving 21,249 patients.

The savings rate improved compared to 15.4% in 2023. The number of patients in the ACO declined 10% year over year. The organization includes patients outside the Philadelphia area.

The region’s biggest ACO is a joint venture of Thomas Jefferson University, Main Line Health, and insurer Humana.

Named the Accountable Care Organization of Pennsylvania (formerly called Delaware Valley ACO), this joint venture had a 6.4% savings rate and earned a $49 million bonus, or nearly 50% more than in 2023. It served 74,756 patients.

Tandigm Value Partners, an ACO run by Tandigm Health and TriValley Primary Care, had the biggest improvement in the savings rate among local ACOs. Its savings rating improved to 13.4% from 8.4%.

Penn started a new ACO last year that is managed by Tandigm. Penn used to own part of Tandigm, but recently sold its interest.

The new ACO, Penn Medicine Healthcare Partners, had 32,860 patients, making it the second-biggest in the region. Its savings rate in the first year of operation was 1.6%, which resulted in a $5.3 million bonus.

Doctors are supposed to use their shares of the bonuses to enhance their practices. Medicare also keeps part of the savings under the program created by the Affordable Care Act.

Editor’s note: This article has been updated to reflect the University of Pennsylvania Health System’s recent sale of its interest in Tandigm Health.