Shared Savings: ACO Reconciliation Payment Mechanics
Shared savings is the upside payment an ACO receives when actual attributed-population spend comes in below the CMS benchmark. The savings amount is multiplied by a sharing rate (50-75%) and adjusted by a quality multiplier.
The shared-savings formula
Simplified: shared savings = (benchmark − actual) × sharing rate × quality multiplier. Each input has nuance:
- Benchmark — set per ACO using a blend of historical and regional spend, with risk adjustment (HCC RAF), trend factors, and (in REACH) a health equity adjustment.
- Actual — sum of Medicare Parts A + B spend for attributed beneficiaries during the performance year.
- Sharing rate — track-dependent. Track 1 (upside-only) typically 50%; risk-bearing tracks up to 75%.
- Quality multiplier — derived from quality measure performance. Failing the quality threshold can zero out savings entirely.
Why the quality multiplier matters more than ACOs realize
An ACO that generates $5M in raw savings but earns only 60% of available quality points still receives $3M after the multiplier. The same ACO at 100% quality receives the full $5M. The marginal cost of moving quality from 60% to 90% is usually a fraction of the $2M differential — making mid-year quality intervention one of the highest-leverage operational decisions in any ACO.
Where Vizier fits
Vizier projects shared-savings outcomes continuously by combining attributed-population spend trajectory (from CCLF), risk-adjusted PMPM, and quality measure performance. The dashboard tells the ACO leadership team what the year-end reconciliation will most likely look like and which intervention moves the number most.