Benzinga | Feb 16, 2021 08:09AM EST

Apollo Medical Holdings, Inc. Announces APA ACO Achieved $19.8M In Shared Savings From Centers For Medicare And Medicaid Services For 2019 Performance Year

ALHAMBRA, Calif., Feb. 16, 2021 /PRNewswire/ -- Apollo Medical Holdings, Inc. ("ApolloMed") (NASDAQ:AMEH), a leading physician-centric, technology-powered healthcare management company, today announced that its wholly-owned subsidiary, APA ACO, Inc. ("APA ACO") generated $37.3 million in gross savings for the 2019 performance year, resulting in $19.8 million in shared savings from the Centers for Medicare & Medicaid Services ("CMS").

APA ACO applied and was approved by CMS to participate in the Next Generation Accountable Care Organization (ACO) Model in 2017. APA ACO was approved to participate in the All-Inclusive Population-Based Payment ("AIPBP") track, which is the most advanced risk-taking payment model. 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 ("PBPM") 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 2019, APA ACO's aggregate benchmark expenditure calculated by CMS was $504.9 million. APA ACO's actual expenditures were $467.6 million, resulting in gross savings of $37.3 million. However, as CMS caps gross savings at 5%-15% of the benchmark expenditure and the Company electing the 5% cap, gross savings maxed out at $25.2 million. APA ACO had chosen an 80/20 risk arrangement with CMS. With a 2% sequestration rate, the resulting net shared savings to APA ACO was $19.8 million for 2019.

Kenneth Sim M.D., Executive Chairman and Co-Chief Executive Officer of ApolloMed, stated, "We believe the $37.3 million in gross savings generated during the 2019 performance year is a testament to ApolloMed's physician-centric, value-based integrated care model, all of which is supported by our internally developed proprietary technologies. We continue to invest in innovation and technology, as it enables us to improve outcomes for our member population by empowering our contracted physicians to provide highly personalized care in a more cost- and time-efficient manner. ApolloMed is continuously working to improve our population health management platform, which combined with our clinical knowledge base and risk management infrastructure, has positioned us to benefit from the ongoing shift to value-based payment models. Our integrated model spans the entire inpatient and outpatient care continuum, which is essential for the delivery of quality, cost-efficient care."