What is the primary purpose of the Medicare Shared Savings Program?

• A. To promote independent practice by physicians without coordination.
• B. To increase hospital funding through bundled payments.
• C. To coordinate care and reduce unnecessary costs for Medicare fee-for-service beneficiaries.
• D. To manage private insurance premiums.

Answer: (C)

The idea is to align incentives so providers coordinate care and cut waste for people in traditional Medicare. The Medicare Shared Savings Program creates accountable care organizations that take responsibility for the overall cost and quality of care for a defined group of Medicare fee-for-service beneficiaries. If the organization can deliver care more efficiently—reducing spending below a set benchmark—while meeting quality standards, it shares in the savings with Medicare. This arrangement encourages better care coordination across doctors, hospitals, and other providers, aiming to avoid unnecessary tests, avoidable hospitalizations, and fragmented care.

So the primary purpose is to coordinate care and reduce unnecessary costs for Medicare fee-for-service beneficiaries. It’s not about promoting independent practice without coordination, increasing hospital funding through bundled payments, or managing private insurance premiums.