Studies Explore Payment Models For ACOs

Two studies examining different payment models for accountable care organizations (ACOs) were published Feb. 13 in JAMA Internal Medicine.

The first study, led by Harvard Medical School’s J. Michael McWilliams, MD, PhD, used fee-for-service Medicare claims from a random 20 percent sample of beneficiaries, including more than 8.3 million hospital admissions and more than 1.5 million stays in skilled nursing facilities (SNFs), to examine changes in post-acute care spending and the use of post-acute care associated with provider participation as ACOs in the Medicare Shared Savings Program (MSSP).

Results showed that for ACOs, entrance into MSSP in 2012 was associated with a 9 percent differential reduction in post-acute spending by 2014, driven by reductions in discharges to facilities, length of facility stays and acute inpatient care. Reported reductions were smaller for later program entrants and similar for ACOs with and without financial ties to hospitals.

Overall, participation in the MSSP has been associated with significant reductions in post-acute care spending without ostensible changes in quality, suggesting gains in the value of health care. McWilliams, et al. conclude that, “Post-acute care spending reductions were more consistent with efforts by clinicians working within hospitals and SNFs to influence care for ACO patients than with hospital-wide initiatives by ACOs or use of preferred SNFs. Understanding such early successes can support regulatory policy that enhances rather than inhibits the effectiveness of payment and delivery system reform.”

In a second study, K. John McConnell, PhD, of the Oregon Health and Science University in Portland, led an examination of early performance in Medicaid ACOs in Oregon and Colorado.

Supported by a $1.9 billion investment from the federal government, Oregon initiated its Medicaid transformation by moving enrollees into 16 Coordinated Care Organizations which managed care within a global budget. Colorado initiated its Medicaid Accountable Care Collaborative in 2011, creating seven Regional Care Collaborative Organizations funded to coordinate care with providers and connect Medicaid enrollees with community services.

Results showed that standardized expenditures for selected services declined in both states from 2010 to 2014, with reports showing no difference between the states. Oregon’s model was associated with reductions in emergency department and primary care visits, as well as other improvements in some utilization, access and quality measures.

The study’s analysis did not include prescription drug expenditures, a growing portion of Medicaid spending. The authors conclude that further evaluation of Medicaid reforms and payment models is needed to inform the most effective and sustainable approaches to improving this public program.

In an editorial comment reviewing both studies, Carrie H. Colla, PhD, and Elliott S. Fisher, MD, MPH, write, “We still have much to learn … we know little about the effects of ACOs on patients’ health and quality of life.” They add that, “Perhaps most important for ACO leaders and the long-term success of these programs, we know little about the key ACO capabilities that are important to ensuring their success in different organizational or market contexts … A long-term commitment to alternative payment model evaluation is necessary to ensure effective, sustainable payment and delivery system reform.”

Keywords: Accountable Care Organizations, Budgets, Emergency Service, Hospital, Federal Government, Fee-for-Service Plans, Health Expenditures, Inpatients, Investments, Managed Care Programs, Medicaid, Medicare, Primary Health Care, Quality of Life, Schools, Medical, Skilled Nursing Facilities, Social Welfare, Subacute Care

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