Study Shows Challenges of Achieving Organizational Accountability in Medicare Through ACOs

The Patient Protection and Affordable Care Act was the most significant regulatory overhaul of the U.S. health care system since the 1960s. Among its intended goals was to reform payment to health care providers so as to reduce the role of fee for service. Inspired by successful shared savings contracts between private insurers and health systems, the Affordable Care Act provided language to define how Accountable Care Organizations (ACOs) are to be paid and how they are to relate to beneficiaries.

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A study published April 21 in JAMA: Internal Medicine   measured three related constructs relevant to ACO incentives and their capacity to manage care: stability of patient assignment, leakage of outpatient care and contract penetration, and found that a third of Medicare beneficiaries assigned to ACOs in 2010 or 2011 were not assigned to the same ACO in both years and much of the specialty care received was provided outside the patients' assigned ACO, suggesting distinct challenges in achieving organizational accountability in Medicare.

The study, led by J. Michael McWilliams, MD, PhD, Department of Health Care Policy, Harvard Medical, and colleagues, used 2010 and 2011 claims data to simulate the spending and care patterns for almost 525,000 beneficiaries attributed to 145 ACOs. Of the beneficiaries assigned to an ACO in in 2010 or 2011, 66 percent were consistently assigned in both years. For those aligned to an ACO, nine percent of office visits to primary care physicians and 67 percent of office visits to specialists were provided outside of the assigned ACO, with the leakage of specialty visits by high-cost beneficiaries occurring at a higher rate. In addition to these findings, of the Medicare spending on outpatient care billed by ACO physicians, 37.9 percent was devoted to assigned beneficiaries, with this proportion even higher for ACOs with greater primary care orientation (60.0 percent for highest quartile vs. 33.6 percent for lowest).

The authors conclude that due to their findings, it's clear beneficiaries have no incentive to stay within the ACO. Moving forward, continued monitoring of these patterns are believed to be essential in developing better regulation and improve care efficiency.

In a related commentary, Paul Ginsburg, PhD, University of Southern California, writes that "For these models to be effective, some complementary Medicare reforms, which have been discussed extensively independently of these models, would be needed. They include revamping the Medicare benefit structure to unify Part A and Part B benefits and provide protection against catastrophic expenses, as well as rules to prevent supplemental insurance from offsetting all patient cost sharing."

He concludes that, "by creating a formal and mutually acknowledged relationship between ACOs and beneficiaries, health care provider organizations that make the investments needed to coordinate care, manage chronic diseases and manage population health would be more likely to succeed."

Keywords: Fee-for-Service Plans, Chronic Disease, Insurance Carriers, Cost Sharing, Social Responsibility, Physicians, Primary Care, Patient Protection and Affordable Care Act, Delivery of Health Care, Investments, Health Expenditures, Health Services Needs and Demand, Accountable Care Organizations, Medicare, Primary Health Care

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