Medicare ACOs don’t disclose how they pay their doctors

Doctor putting money in pocket
Ninety-one percent of the ACOs that provide care to 9 million Medicare patients refused to disclose their physician payment incentives as part of a study published in the American Journal of Public Health. (Getty/Niyazz)

The law doesn’t require Medicare accountable care organizations (ACOs) to disclose their physician payment incentives, and now a new study finds that most aren't willing to either. 

When contacted as part of the study, 91% of the ACOs that provide care to 9 million Medicare patients refused to disclose their physician payment incentives, according to an article published in the American Journal of Public Health.

While the Centers for Medicare & Medicaid Services requires all managed care organizations that receive federal funds to disclose how they pay physicians, the government has waived the requirement for ACOs. That led a research team from Montefiore Medical Center in New York City, City University of New York at Hunter College and the national consumer group Public Citizen to survey all 426 ACOs that participated in Medicare in 2015.

The survey asked how each ACO paid its primary care and specialist physicians, and whether doctors were financially penalized for ordering tests or making referrals that can increase costs. Despite repeated email and mail surveys, only 39 ACOs (9.2%) provided any information on their physician payment policies, according to the study.

ACOs receive capitation-like payments and keep a portion of savings if they reduce patients' use of care. That has some people worried that ACOs—much like HMOs in the 1990s that resulted in the CMS disclosure requirement—might pressure their doctors to deny needed care to patients.

"In 1995, I was fired by U.S. Healthcare—now called Aetna—for violating a 'gag clause' in my contract, and revealing that the HMO offered doctors big bonuses for denying care to our patients,” David Himmelstein, M.D., a professor at the City University of New York at Hunter College and lecturer in medicine at Harvard, who was the study's senior author, said in an emailed announcement about the study. “In response to the ensuing public outcry, Medicare banned gag clauses and required HMOs to disclose how they pay physicians. The same rules should apply to ACOs, which are essentially the modern version of HMOs."

Among the few ACOs that responded to the researchers’ survey, 85% indicated that they tied primary care providers’ compensation to quality metrics. Almost half said they offered doctors incentives to reduce care, via bonuses or withholds (financial penalties) on how much care individual doctors ordered for their patients. In other cases, physician reimbursement was tied to the bonuses or penalties that ACOs received from Medicare, the study said.

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The researchers said they don’t agree with CMS’ decision to waive the disclosure requirement for ACOs, which have been contracting with Medicare since 2011. “The lack of ACO transparency means that millions of Medicare patients can't know how their doctors are being paid. Despite this, ACOs have garnered support from policymakers,” said study author Mayce Mansour, M.D., a primary care physician at Mount Sinai who was a lead author of the study and a resident at Montefiore when the study was initiated.

ACOs were established under the Affordable Care Act to improve care and reduce costs. More than 850 ACOs currently provide care to more than 28 million patients across the country. This year 570 ACOs will participate in CMS models, including the Shared Savings Program, Next Generation ACO Model and The Comprehensive ESRD Care Model.