Shared Savings

Payments flow on a FFS basis as usual but if the provider is able to keep actual medical costs below expectations established by the payer on an empirical basis, he or she retains a portion, up to 100 percent, of the savings generated (Savings can be calculated for a particular service, set of services, or for all services provided to either an individual beneficiary or a defined population of beneficiaries over the course of a year). A provider qualifying for a shared savings award must also meet standards for quality of care, which can also, under certain payment models, influence the portion of total savings the provider retains, or the “shared savings ratio.”