The report comes amid projections that Medicare spending will exceed $1.5 trillion by 2028, which is more than double the $708 billion in spending in 2017.
A federal review of 20 top-performing Medicare Shared Savings Program accountable care organizations (ACO) identified seven broad strategies for success.
The Health and Human Services Office of Inspector General, relying on interviews and self-reporting from ACO officials, asked them to identify successful strategies they used to lower Medicare spending and improve care quality.
The report comes amid projections that Medicare spending will exceed $1.5 trillion by 2028, which is more than double the $708 billion in spending in 2017. The Shared Savings Program is one of the largest alternative payment models, accounting for $168 billion in Medicare expenditures over its first three years, 2013-2015.
This OIG study is a follow-up to a 2017 study that found ACOs saved Medicare about $1 billion from 2013 through 2015, while improving quality across most metrics.
OIG also found in the 2017 report that high-performing ACOs relied heavily on frequent primary care visits that reduced the use of emergency department visits, and lowered spending by an average of $673 per person.
The 20 ACOs examined by OIG for the new report started in the Shared Savings Program, but five of them moved to the Next Generation ACO Model at the time of the OIG review.
The 20 ACOs all demonstrated a reduction in spending and overall quality scores of 90 or higher over three years, however OIG acknowledged that their findings are somewhat limited because they rely upon unverified self-reporting.
OIG took the findings and grouped them across seven areas.
1. Work with physicians
ACOs report that working with physicians in the ACOs is critical to lowering costs and improving quality. However, ACOs say that physicians are often unaware of the cost of services and may order more expensive services than are necessary or refer to specialists without factoring in the cost of services. In addition, physicians are often overburdened by administrative tasks, thereby reducing the time they have to care for beneficiaries. ACOs also note that they need to work with physicians to address quality measures and to close gaps in care—particularly for screening beneficiaries for needed care.
2. Engage beneficiaries to improve their own health.
Encouraging beneficiaries to take a more active role in their health can lead to better health outcomes, but ACOs note that it is challenging to build relationships between physicians and beneficiaries. To address these challenges, many ACOs focus on increasing beneficiaries' utilization of annual wellness visits to build relationships with physicians and to engage beneficiaries in their health.
3. Manage beneficiaries with costly or complex care needs.
Almost all ACOs use care coordinators. They ensure that when beneficiaries leave the hospital, they have the correct medication and equipment, as well as a follow-up visit with their primary care provider. Care coordinators also help beneficiaries schedule appointments and ensure that beneficiaries have care plans in place. Many ACOs also periodically check with beneficiaries in between physician visits to monitor changes in their health. Over half of the ACOs have care coordinators or physicians who visit beneficiaries in their homes.
4. Reduce avoidable hospitalizations and improve hospital care
ACOs note that hospitals are often difficult to engage; they also find that hospitals often lack the incentive to lower their costs partly because they are reimbursed primarily based on the volume of admissions. ACOs face challenges with reducing avoidable hospitalizations and with encouraging beneficiaries to seek alternatives to emergency room care when possible. Most ACOs provide additional access to primary care services.
5. Control costs and improve quality in skilled nursing and home healthcare.
ACOs say their ability to coordinate care and influence cost is limited because SNFs and HHAs are not typically included in the ACOs, and that these providers may not share the same incentives to lower cost and improve quality. In addition, beneficiaries must be fully-admitted to a hospital for three nights to qualify for SNF benefits under Medicare Part A's "3-day rule." That can limit an ACO's ability to arrange the most appropriate and cost-effective care. Concerns exist that the 3-day rule can result in unnecessary hospitalizations when it is safe to transfer patients directly to a SNF without hospitalization or when fewer than 3 days of hospitalization are needed.
6. Address behavioral health needs and social determinants of health.
When left untreated, behavioral health conditions often result in costly services, such as avoidable emergency room visits and longer hospital stays. ACOs report a number of challenges with addressing beneficiaries’ behavioral needs. These most commonly include a lack of behavioral healthcare providers, limited availability of data to identify beneficiaries who have behavioral health needs, and fragmented approaches to physical and behavioral healthcare.
7. Use technology to increase information sharing among providers.
Sharing medical information is helpful to coordinate care among different providers and across different settings. However, ACOs report that they do not always have access to beneficiaries' medical information from other providers—including ACO providers and providers outside the ACO—that are involved in their beneficiaries' care. They note challenges with the interoperability of ACO providers' systems and with using State and regional data systems to communicate with providers outside their ACOs.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
HHS asked 20 top-performing ACOs to identify successful strategies they used to lower Medicare spending and improve care quality.
The 20 ACOs all demonstrated a reduction in spending and overall quality scores of 90 or higher over three years.
Federal analysts took the findings and grouped them across seven broad areas.