Medicare changes needed to improve ACO benefits

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Based on care patterns among accountable care organization (ACO) beneficiaries, many barriers remain to achieving organizational accountability in Medicare, according to a recent study published in JAMA Internal Medicine.

Researchers, led by J. Michael McWilliams, M.D., Ph.D., from the Department of Health Care Policy, Harvard Medical School in Boston, examined 2010-2011 Medicare claims from 524,246 beneficiaries hypothetically assigned to 145 ACOs prior to the start of the Medicare ACO programs. They measured for stability of patient assignment, leakage of outpatient care, and contract penetration to measure ACO incentives and capacity to manage care, according to the study. They compared estimates by patient complexity, ACO size and the primary care orientation of the ACO specialty mix.

Researchers discovered that 80.4 percent of ACO beneficiaries in 2010 were assigned to the same ACO in 2011, and of those assigned to an ACO in 2010 or 2011, 66 percent were assigned both years. Beneficiaries with fewer conditions and office visits, as well as those in several high-cost categories, were the most common unstable assignments.

Among the ACO-assigned beneficiaries, 8.7 percent of offices visits with a primary care physician occurred at outside of the assigned ACO, along with 66.7 percent of office visits with specialists. Outpatient care leakage was highest among higher-cost beneficiaries and specialty-oriented ACOs. Of Medicare spending on outpatient care billed by ACO doctors, 37.9 percent went to assigned beneficiaries, especially in ACOs with greater primary care orientation, according to the study.

These issues create even more challenges for ACOs, according to accompanying commentary published in JAMA Internal Medicine. The Affordable Care Act legislation defining how ACOs receive payment leaves beneficiaries out of the equation and didn't offer incentives to commit to or choose an ACO, author Paul B. Ginsburg, Ph.D., argues. This could severely undermine the potential to improve care and control costs, according to Ginsburg.

For ACO models to be effective, the industry needs complementary Medicare reforms, Ginsburg writes, including "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."

The American Hospital Association is lobbying the Centers for Medicare & Medicaid Services to back off on some of the requirements of its Medicare Shared Savings ACO program, saying the current rules place too much financial risk on providers without offering them enough financial rewards, FierceHealthFinance reported.

To learn more:
- here's the first study
- read the commentary

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