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Analysis

MedPAC: Inconsistent ACO Participants Have Much Higher Costs

By Steven Porter  
   June 14, 2019

The finding 'raises some fundamental questions' about whether ACOs are prepared to handle catastrophic health events, says MedPAC's executive director.

Beneficiaries who participate inconsistently in Accountable Care Organizations (ACO) under the Medicare Shared Savings Program (MSSP) have much higher healthcare costs than do beneficiaries who never participated in an ACO to begin with, according to a report released Friday afternoon by the Medicare Payment Advisory Commission (MedPAC).

Beneficiaries who participated in the same ACO consistently year after year saw slower cost growth than their peers in the same market. Those who were assigned to the same ACO in 2013-2016 saw spending growth 10.0 percentage points lower than the market average, according to Chapter 6 of the 500-page report.

"That's a good thing," MedPAC Executive Director James E. Mathews, PhD, said Friday in a call with reporters. "It suggests that ACOs are doing something to influence spending growth."

"Interestingly," he added, "we also find that beneficiaries who were never assigned to an ACO over this four-year period also had lower spending growth than the average beneficiary—not quite as much as the ones who were assigned to an ACO but still below average."

Medicare beneficiaries who were never assigned to an ACO in 2013-2016 saw spending growth 1.3 percentage points lower than the market average, according to the MedPAC report.

Those who were assigned to the same ACO for three years, 2013-2015, then switched ACOs or dropped out in 2016 for one reason or another, however, saw spending growth 13.8 percentage points higher than the market average, according to the report.

Mathews said researchers have more work to do to figure out precisely why inconsistent ACO participation is associated with higher spending, but there's a prevailing hunch.

"The dominant theory right now is that the beneficiary experienced a catastrophic health event that may have required them to start seeing a different group of clinicians and thus they got assigned out of an ACO, or if they were not in an ACO, that catastrophic event got them assigned to an ACO," he said.

Related: CMS Releases Final MSSP Rule for ACOs

Related: Double the Savings? ACO Group Questions CMS Analysis of MSSP Performance

"We're continuing to dig into this question," he added. "But it also raises some fundamental questions about whether or not ACOs have the tools and apparatus to really be able to manage a catastrophic health event that an assigned beneficiary may experience."

The Affordable Care Act established MSSP ACOs, which began operating in 2012. The program grew to include 432 ACOs with 7.9 million assigned beneficiaries in 2016, according to the MedPAC report.

The full report, which includes 12 chapters on separate topics as MedPAC's statutorily required report for June 2019, is available on the commission's website.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Those who switched ACOs in 2016 or dropped out entirely saw spending growth nearly 14 percentage points higher than the market average.

More research is needed to know for sure, but one theory is that beneficiaries who switch ACOs often do so due to catastrophic health events.

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