Apollo Medical: APA ACO unit generated $12.96M in gross savings in 2017

Apollo Medical Holdings, Inc. announced that its wholly-owned subsidiary, APA ACO, Inc. generated $12.96M in gross savings in its first performance year and that, as a result, it achieved $5.9M in shared savings from the Centers for Medicare & Medicaid Services. APA ACO was one of 44 Next Generation Accountable Care Organizations in the country selected by CMS to participate in the Next Generation ACO Model in 2017. APA ACO was approved to participate in the All-Inclusive Population-Based Payment track, which is the most advanced risk-taking payment model, and was the only Next Generation ACO in the country out of 44 ACOs to participate in the AIPBP track in 2017. Under the AIPBP track, CMS estimates the total annual expenditures for the Next Generation ACO’s patients and then pays that projected amount to the ACO in a per-beneficiary, per-month payment. The Next Generation ACO is then responsible for paying all Part A and Part B costs for in-network participating providers and preferred providers with whom it has contracted. For 2017, APA ACO’s aggregate benchmark expenditure calculated by CMS was $390.56M. APA ACO’s actual expenditures were $377.6M, resulting in gross savings of $12.96M. CMS then deducted a stop-loss charge of $5.44M, resulting in gross savings after stop-loss charge of $7.52M. APA ACO had chosen an 80/20 risk arrangement with CMS, and therefore the net shared savings to APA ACO is $5.90M. Since ApolloMed had already accrued APA ACO expenses for 2017, all of the $5.90M payment was recognized as net income in its 2018 3rd quarter financial statements included in its Form 10Q.
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