After assessing the first-year performance of accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP), researchers report that the cohort of ACOs entering the program in 2012 experienced reductions in Medicare spending in comparison with a control group of ACOs, but the cohort of ACOs that entered the MSSP program in 2013 did not experience similar reductions. 

Moreover, the Centers for Medicare and Medicaid Services (CMS) paid out more in shared savings payments to the 2012 cohort of ACOs ($244 million) than those ACOs saved (an estimated $238 million). Since participating ACOs do not have to reimburse Medicare if their spending exceeds the benchmark, CMS was unable to offset the loss.

The researchers used 2009-13 Medicare claims to compare changes in spending and performance on quality measures. They evaluated 220 ACOs altogether, assessing those that entered the program in mid-2012 separately from those that entered in January 2013. Adjustments were made for geographical variations and beneficiary characteristics. 

Compared with the control ACOs, the change in mean total annual Medicare spending in 2013 for the mid-2012 MSSP entrants was -$144 per beneficiary (P=0.02), representing an estimated 1.4 percent savings. The change for the January 2013 MSSP entrants relative to the control group, however, was only -$3 per beneficiary (P=0.96). Savings were greater for independent primary care groups than for hospital-owned groups.

Performance improved on some quality measures for the participating ACO cohorts in comparison with the control ACOS and remained unchanged on other quality measures. 

The authors said their findings suggest that meaningful savings from the MSSP “may be slow to develop.” They also noted that so far the incentives offered to ACOs “have been very weak” and that regulatory changes to strengthen incentives might accelerate savings.

The results were published online April 13 ahead of print by The New England Journal of Medicine.

Our Take: The most interesting finding in this study is that ACOs led by independent primary care physician groups saved more than those led by vertically integrated systems. A deeper cut at the data reveals that these physician-led organizations were more effectively able to reduce spending on both inpatient and outpatient care than were hospital-led ACOs.

Vertically integrated organizations should, in theory, be more effective at managing inputs and outputs because they have their hands on all the levers. Not so. At least not yet. With one foot on the proverbial dock and the other in the canoe—our apologies for the tired metaphor—hospitals are still incentivized to provide more services. Until the majority of payments are tied to value, hospital-led ACOs will continue to lag behind independent physician groups.

It is worth noting that ACOs tied to multispecialty groups fared about as well as ACOs that were integrated with hospitals. Primary care appears to be the key to greater savings.

Leave a comment