Risk Adjustment In Medicare ACO Program Deters Coding Increases But May Lead ACOs To Drop High-Risk Beneficiaries

Medicare Payments and ACOs for Dementia Patients Across Race and Social Vulnerability

OBJECTIVES

This study investigated variations in Medicare payments for Alzheimer's disease and related dementia (ADRD) by race, ethnicity, and neighborhood social vulnerability, together with cost variations by beneficiaries' enrollment in Accountable Care Organizations (ACOs).

METHODS

We used merged datasets of longitudinal Medicare Beneficiary Summary File (2016-2020), the Social Vulnerability Index (SVI), and the Medicare Shared Savings Program (MSSP) ACO to measure beneficiary-level ACO enrollment at the diagnosis year of ADRD. We analyzed Medicare payments for patients newly diagnosed with ADRD for the year preceding the diagnosis and for the subsequent 3 years. The dataset included 742,175 Medicare fee-for-service (FFS) beneficiaries aged 65 and older with a new diagnosis of ADRD in 2017 who remained in the Medicare FFS plan from 2016 to 2020.

RESULTS

Among those newly diagnosed, Black and Hispanic patients encountered higher total costs compared to White patients, and ADRD patients living in the most vulnerable areas experienced the highest total costs compared to patients living in other regions. These cost differences persisted over 3 years postdiagnosis. Patients enrolled in ACOs incurred lower costs across all racial and ethnic groups and SVI areas. For ADRD patients living in the areas with the highest vulnerability, the cost differences by ACO enrollment of the total Medicare costs ranged from $4,403.1 to $6,922.7, and beneficiaries' savings ranged from $114.5 to $726.6 over three years post-ADRD diagnosis by patient's race and ethnicity.

CONCLUSIONS

Black and Hispanic ADRD patients and ADRD patients living in areas with higher social vulnerability would gain more from ACO enrollment compared to their counterparts.

Differential Hospital Participation in Bundled Payments in Communities with Higher Shares of Marginalized Populations

BACKGROUND

Medicare's voluntary bundled payment programs have demonstrated generally favorable results. However, it remains unknown whether uneven hospital participation in these programs in communities with greater shares of minorities and patients of low socioeconomic status results in disparate access to practice redesign innovations.

OBJECTIVE

Examine whether communities with higher proportions of marginalized individuals were less likely to be served by a hospital participating in Bundled Payments for Care Improvement Advanced (BPCI-Advanced).

DESIGN

Cross-sectional study using ordinary least squares regression controlling for patient and community factors.

PARTICIPANTS

Medicare fee-for-service patients enrolled from 2015-2017 (pre-BPCI-Advanced) and residing in 2,058 local communities nationwide defined by Hospital Service Areas (HSAs). Each community's share of marginalized patients was calculated separately for each of the share of beneficiaries of Black race, Hispanic ethnicity, or dual eligibility for Medicare and Medicaid.

MAIN MEASURES

Dichotomous variable indicating whether a given community had at least one hospital that ever participated in BPCI-Advanced from 2018-2022.

KEY RESULTS

Communities with higher shares of dual-eligible individuals were less likely to be served by a hospital participating in BPCI-Advanced than communities with the lowest quartile of dual-eligible individuals (Q4: -15.1 percentage points [pp] lower than Q1, 95% CI: -21.0 to -9.1, p < 0.001). There was no consistent significant relationship between community proportion of Black beneficiaries and likelihood of having a hospital participating in BPCI-Advanced. Communities with higher shares of Hispanic beneficiaries were more likely to have a hospital participating in BPCI-Advanced than those in the lowest quartile (Q4: 19.2 pp higher than Q1, 95% CI: 13.4 to 24.9, p < 0.001).

CONCLUSIONS

Communities with greater shares of dual-eligible beneficiaries, but not racial or ethnic minorities, were less likely to be served by a hospital participating in BPCI-Advanced Policymakers should consider approaches to incentivize more socioeconomically uniform participation in voluntary bundled payments.

Drivers of Individual and Regional Variation in CMS Hierarchical Condition Categories Among Florida Beneficiaries

Objective

To explore hierarchical condition categories (HCC) risk score variation among Florida Fee for Service (FFS) Medicare beneficiaries between 2016 and 2018.

Data Sources

This study analyzed HCC risk score variation using Medicare claims data for Florida beneficiaries enrolled in Parts A & B between 2016 and 2018.

Study Design

The CMS methodology analyzed HCC risk score variation using annual mean county- and beneficiary-level risk score changes. The association between variation and beneficiary characteristics, diagnoses, and geographic location was characterized using mixed-effects negative binomial regression models.

Data Collection

Not applicable.

Principal Findings

Counties in the Northeast [marginal effect (ME)=-0.003], Central (ME=-0.021), and Southwest (ME=-0.009) Florida have relatively lower mean risk scores. A higher number of lifetime (ME=0.246) and treatable (ME=0.288) conditions were associated with higher county-level risk scores, while more preventable conditions (ME=-0.249) were associated with lower risk scores. Counties with older beneficiaries (ME=0.015) and more Blacks (ME=0.070) have higher risk scores, while having female beneficiaries reduced risk scores (ME=-0.005). Individual risk scores did not vary by age (ME=0.000), but Blacks (ME=0.001) had higher rates of variation relative to Whites, while other races had comparatively lower variation (ME=-0.003). In addition, individuals diagnosed with more lifetime (ME=0.129), treatable (ME=0.235), and preventable (ME=0.001) conditions had higher risk score variation. Most condition-specific indicators showed small associations with risk score changes; however, metastatic cancer/acute leukemia, respirator dependence/tracheostomy, and pressure ulcers of the skin were significantly associated with both types of HCC risk score variation.

Conclusion

Results showed demographics, HCC condition classifications (ie, lifetime, preventable, and treatable), and some specific conditions were associated with higher variation in mean county-level and individual risk scores. Results suggest consistent coding and reductions in the prevalence of certain treatable or preventable conditions could reduce the county and individual HCC risk score year-to-year change.

A Decade of ACOs in Medicare: Have They Delivered on Their Promise?

Accountable care organizations (ACOs) were envisioned as a way to address both health care cost growth and uneven quality in US health care. They emerged in the early 2000s, with the 2010 Affordable Care Act (ACA) establishing a Medicare ACO program. In the decade since their launch, ACOs have grown into one of Medicare's flagship payment reform programs, with millions of beneficiaries receiving care from hundreds of ACOs. While great expectations surrounded ACOs' introduction into Medicare, their impacts to date have been modest. ACOs have achieved some savings and improvements in measured quality, but disagreement persists over the meaning of those results: Do ACOs represent important, incremental steps forward on the path toward a more efficient, high-quality health care system? Or do their modest achievements signal a failure of large-scale progress despite the substantial investments of resources? ACOs have proven to be politically resilient, largely sidestepping the controversies and partisan polarization that have led to the demise of other ACA provisions. But the same features that have enabled ACOs to evade backlash have constrained their impacts and effectiveness. After a decade, ACOs' long-term influence on Medicare and the US health care system remains uncertain.

Hospital-physician integration and risk-coding intensity

Hospital-physician integration has surged in recent years. Integration may allow hospitals to share resources and management practices with their integrated physicians that increase the reported diagnostic severity of their patients. Greater diagnostic severity will increase practices' payment under risk-based arrangements. We offer the first analysis of whether hospital-physician integration affects providers' coding of patient severity. Using a two-way fixed effects model, an event study, and a stacked difference-in-differences analysis of 5 million patient-year observations from 2010 to 2015, we find that the integration of a patient's primary care doctor is associated with a robust 2%-4% increase in coded severity, the risk-score equivalent of aging a physician's patients by 4-8 months. This effect was not driven by physicians treating different patients nor by physicians seeing patients more often. Our evidence is consistent with the hypothesis that hospitals share organizational resources with acquired physician practices to increase the measured clinical severity of patients. Increases in the intensity of coding will improve vertically-integrated practices' performance in alternative payment models and pay-for-performance programs while raising overall health care spending.

Coding-Driven Changes In Measured Risk In Accountable Care Organizations

Claims data, which form the foundation of risk adjustment in payment for health care services, may reflect efforts to capture more-or more severe-clinical conditions rather than true changes in health status. This can distort payments. We quantify this in the context of Medicare's accountable care organization (ACO) program by comparing risk scores derived from two different measurement approaches. One approach uses diagnoses coded on claims based on Centers for Medicare and Medicaid Services Hierarchical Condition Categories (HCC), and the other uses self-reported, survey-based health data from the Consumer Assessment of Healthcare Providers and Systems (CAHPS). During 2013-16 HCC-based risk scores grew faster than CAHPS-based risk scores (2.1 percent versus 0.3 percent annually), and the gap in HCC- and CAHPS-based risk score growth varied widely across ACOs. The average gap in risk score growth appears to be the result primarily of HCC coding practices rather than poor performance of the CAHPS model, suggesting that coding practices (not necessarily driven by ACO contracts) may account for most of the observed risk score growth for ACO beneficiaries.

Disparities in Preventable Hospitalization Among Patients With Alzheimer Diseases

INTRODUCTION

System-level care coordination strategies can be the most effective to promote continuity of care among people with Alzheimer's disease; however, the evidence is lacking. The objective of this study is to determine whether accountable care organizations are associated with lower rates of potentially preventable hospitalizations for people with Alzheimer's disease and whether hospital accountable care organization affiliation is associated with reduced racial and ethnic disparities in preventable hospitalizations among patients with Alzheimer's disease.

METHODS

This study employed a cross-sectional study design and used 2015 Healthcare Cost and Utilization Project inpatient claims data from 11 states and the 2015 American Hospital Association Annual Survey. Logistic regression and the Blinder-Oaxaca decomposition method were used.

RESULTS

African American patients with Alzheimer's disease were less likely to be hospitalized at accountable care organization‒affiliated hospitals than White patients. Among patients with Alzheimer's disease who were hospitalized, hospital accountable care organization affiliation was associated with lower odds of potentially preventable hospitalizations (OR=0.86, p=0.02; OR=0.66, p<0.001 with propensity score matching) after controlling for patient characteristics, hospital characteristics, and state indicators. Hospital accountable care organization affiliation explained 3.01% (p<0.01) of the disparity in potentially preventable hospitalizations between White and African American patients but could not explain disparities between White and Latinx patients.

CONCLUSIONS

Evidence suggests that accountable care organizations may be able to improve care coordination for people with Alzheimer's disease and to reduce disparities between Whites and African Americans. Further research is needed to determine whether this benefit can be attributed to accountable care organization formation or whether providers that participate in accountable care organizations tend to provide higher-quality care.

The Impact of Medicare's Alternative Payment Models on the Value of Care

Over the past decade, the Centers for Medicare and Medicaid Services (CMS) have led the nationwide shift toward value-based payment. A major strategy for achieving this goal has been to implement alternative payment models (APMs) that encourage high-value care by holding providers financially accountable for both the quality and the costs of care. In particular, the CMS has implemented and scaled up two types of APMs: population-based models that emphasize accountability for overall quality and costs for defined patient populations, and episode-based payment models that emphasize accountability for quality and costs for discrete care. Both APM types have been associated with modest reductions in Medicare spending without apparent compromises in quality. However, concerns about the unintended consequences of these APMs remain, and more work is needed in several important areas. Nonetheless, both APM types represent steps to build on along the path toward a higher-value national health care system.

Estimates of ACO savings in the presence of provider and beneficiary selection

BACKGROUND

Medicare's accountable care organizations (ACOs)-designed to improve quality and lower spending-were associated with growing savings in previous studies. However, savings estimates may be biased by beneficiary sorting among providers based on healthcare needs and by providers opting into the program based on anticipated gains.

METHODS

Using Medicare administrative claims (2009-2014), we compared annual spending changes after provider organizations joined ACOs to changes in non-ACOs (controls). To address provider selection, using novel data to identify non-ACO organizations, we restricted controls to comparably large provider organizations. To address beneficiary selection, we (a) estimated within-organization (including non-ACO comparison organizations) spending changes, (b) estimated within-beneficiary spending changes, (c) incorporated beneficiaries without qualifying healthcare expenses, and (d) used a fixed beneficiary ACO assignment using the pre-ACO period.

RESULTS

Each year, 19% of Medicare beneficiaries switched provider organizations. Spending was higher for switchers than stayers ($3163, p < .001) and grew more the next year ($2004; p < .001). Starting from a baseline regression modeled on previous ACO evaluations, estimated savings varied widely as we sequentially introduced methods to address selection. Combining methods, however, generated more stable estimated ACO savings of $46 (p = .022), averaged across cohorts.

CONCLUSIONS

When implementing a comprehensive suite of methods to adjust for provider and beneficiary selection, we estimated ACO savings that grew over time. Our estimates are in line with, but smaller than, previous estimates in the literature. Implementing piecemeal adjustments produced misleading results.

IMPLICATIONS

Our results confirm the importance of selection for savings estimates and for provider organizations managing costs and quality. Attribution rules that consider multiple years may help mitigate the impact of beneficiary churn for providers and payers. Implementing payment reform by randomizing early participants, or implementing fully across selected markets, may better serve efforts to evaluate and improve payment models.

LEVEL OF EVIDENCE

Level 3.

Value-Based Provider Payment Initiatives Combining Global Payments With Explicit Quality Incentives: A Systematic Review

An essential element in the pursuit of value-based health care is provider payment reform. This article aims to identify and analyze payment initiatives comprising a specific manifestation of value-based payment reform that can be expected to contribute to value in a broad sense: (a) global base payments combined with (b) explicit quality incentives. We conducted a systematic review of the literature, consulting four scientific bibliographic databases, reference lists, the Internet, and experts. We included and compared 18 initiatives described in 111 articles/documents on key design features and impact on value. The initiatives are heterogeneous regarding the operationalization of the two payment components and associated design features. Main commonalities between initiatives are a strong emphasis on primary care, the use of "virtual" spending targets, and the application of risk adjustment and other risk-mitigating measures. Evaluated initiatives generally show promising results in terms of lower spending growth with equal or improved quality.

Savings or Selection? Initial Spending Reductions in the Medicare Shared Savings Program and Considerations for Reform

Policy Points Concerns have been raised about risk selection in the Medicare Shared Savings Program (MSSP). Specifically, turnover in accountable care organization (ACO) physicians and patient panels has led to concerns that ACOs may be earning shared-savings bonuses by selecting lower-risk patients or providers with lower-risk panels. We find no evidence that changes in ACO patient populations explain savings estimates from previous evaluations through 2015. We also find no evidence that ACOs systematically manipulated provider composition or billing to earn bonuses. The modest savings and lack of risk selection in the original MSSP design suggest opportunities to build on early progress. Recent program changes provide ACOs with more opportunity to select providers with lower-risk patients. Understanding the effect of these changes will be important for guiding future payment policy.

CONTEXT

The Medicare Shared Savings Program (MSSP) establishes incentives for participating accountable care organizations (ACOs) to lower spending for their attributed fee-for-service Medicare patients. Turnover in ACO physicians and patient panels has raised concerns that ACOs may be earning shared-savings bonuses by selecting lower-risk patients or providers with lower-risk panels.

METHODS

We conducted three sets of analyses of Medicare claims data. First, we estimated overall MSSP savings through 2015 using a difference-in-differences approach and methods that eliminated selection bias from ACO program exit or changes in the practices or physicians included in ACO contracts. We then checked for residual risk selection at the patient level. Second, we reestimated savings with methods that address undetected risk selection but could introduce bias from other sources. These included patient fixed effects, baseline or prospective assignment, and area-level MSSP exposure to hold patient populations constant. Third, we tested for changes in provider composition or provider billing that may have contributed to bonuses, even if they were eliminated as sources of bias in the evaluation analyses.

FINDINGS

MSSP participation was associated with modest and increasing annual gross savings in the 2012-2013 entry cohorts of ACOs that reached $139 to $302 per patient by 2015. Savings in the 2014 entry cohort were small and not statistically significant. Robustness checks revealed no evidence of residual risk selection. Alternative methods to address risk selection produced results that were substantively consistent with our primary analysis but varied somewhat and were more sensitive to adjustment for patient characteristics, suggesting the introduction of bias from within-patient changes in time-varying characteristics. We found no evidence of ACO manipulation of provider composition or billing to inflate savings. Finally, larger savings for physician group ACOs were robust to consideration of differential changes in organizational structure among non-ACO providers (eg, from consolidation).

CONCLUSIONS

Participation in the original MSSP program was associated with modest savings and not with favorable risk selection. These findings suggest an opportunity to build on early progress. Understanding the effect of new opportunities and incentives for risk selection in the revamped MSSP will be important for guiding future program reforms.

Proportion of Racial Minority Patients and Patients With Low Socioeconomic Status Cared for by Physician Groups After Joining Accountable Care Organizations

Importance

The incentive structure of accountable care organizations (ACOs) may lead to participating physician groups selecting fewer vulnerable patients.

Objective

To test for changes in the percentage of racial minority patients and patients with low socioeconomic status cared for by physician groups after joining the ACO.

Design, Setting, and Participants

This retrospective cohort consisted of a 15% random sample of Medicare fee-for-service beneficiaries attributed to physician groups from 2010 to 2016. Medicare Shared Savings Program (MSSP) participation was determined using ACO files. Analyses were conducted between January 1, 2019, and February 25, 2020.

Exposures

Using linear probability models, we conducted difference-in-differences analyses based on the year a physician group joined an ACO to estimate changes in vulnerable patients within ACO-participating groups compared with nonparticipating groups.

Main Outcomes and Measures

Whether the patient was black, was dually enrolled in Medicare and Medicaid, and poverty and unemployment rates of the patient's zip code.

Results

In a cohort of 76 717 physician groups caring for 7 307 130 patients, 16.1% of groups caring for 27.8% of patients participated in an MSSP ACO. Using 2010 characteristics, patients attributed to ACOs from 2012 to 2016, compared with those who were not, were less likely to be black (8.0% [n = 81 698] vs 9.3% [n = 270 924]) or dually enrolled in Medicare and Medicaid (12.8% [n = 130 957] vs 18.2% [n = 528 685]), and lived in zip codes with lower poverty rates (13.8% vs 15.5%); unemployment rates were similar (8.0% vs 8.5%). In the difference-in-differences analysis, there was no statistically significant change associated with ACO participation in the proportions of vulnerable patients attributed to ACO-participating groups compared with nonparticipating groups. After joining an ACO, ACO-participating groups had 0.0 percentage points change (95% CI, -0.1 to 0.1 percentage points; P = .59) for black patients, -0.1 percentage points (95% CI, -0.2 to 0.1 percentage points; P = .32) for patients dually enrolled in Medicare and Medicaid, 0.2 percentage points (95% CI, -3.5 to 4.0 percentage points; P = .91) in poverty rates, and -0.4 percentage points (95% CI, -2.0 to 1.2 percentage points; P = .62) in unemployment rates.

Conclusions and Relevance

In this cohort study, there were no changes in the proportions of vulnerable patients cared for by ACO-participating physician groups after joining an ACO compared with changes among nonparticipating groups.

Low-Value Care and Clinician Engagement in a Large Medicare Shared Savings Program ACO: a Survey of Frontline Clinicians

BACKGROUND

Although the Medicare Shared Savings Program (MSSP) created new incentives for organizations to improve healthcare value, Accountable Care Organizations (ACOs) have achieved only modest reductions in the use of low-value care.

OBJECTIVE

To assess ACO engagement of clinicians and whether engagement was associated with clinicians' reported difficulty implementing recommendations against low-value care.

DESIGN

Cross-sectional survey of ACO clinicians in 2018.

PARTICIPANTS

1289 clinicians in the Physician Organization of Michigan ACO, including generalist physicians (18%), internal medicine specialists (16%), surgeons (10%), other physician specialists (27%), and advanced practice providers (29%). Response rate was 34%.

MAIN MEASURES

Primary exposures included clinicians' participation in ACO decision-making, awareness of ACO incentives, perceived influence on practice, and perceived quality improvement. Our primary outcome was clinicians' reported difficulty implementing recommendations against low-value care.

RESULTS

Few clinicians participated in the decision to join the ACO (3%). Few clinicians were aware of ACO incentives, including knowing the ACO was accountable for both spending and quality (23%), successfully lowered spending (9%), or faced upside risk only (3%). Few agreed (moderately or strongly) the ACO changed compensation (20%), practice (19%), or feedback (15%) or that it improved care coordination (17%) or inappropriate care (13%). Clinicians reported they had difficulty following recommendations against low-value care 18% of the time; clinicians reported patients had difficulty accepting recommendations 36% of the time. Increased ACO awareness (1 standard deviation [SD]) was associated with decreased difficulty (- 2.3 percentage points) implementing recommendations (95% confidence interval [CI] - 3.8, - 0.7), as was perceived quality improvement (1 SD increase, - 2.1 percentage points, 95% CI, - 3.4, - 0.8). Participation in ACO decision-making and perceived influence on practice were not associated with recommendation implementation.

CONCLUSIONS

Clinicians participating in a large Medicare ACO were broadly unaware of and unengaged with ACO objectives and activities. Whether low clinician engagement limits ACO efforts to reduce low-value care warrants further longitudinal study.

Gynecologic oncology care in the world of accountable care organizations

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Accountable care organizations are increasing in healthcare systems.

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Accountable care organizations previously have focused on primary care.

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Subspecialty care and surgical fields are a new focus for ACOs and value-based care.

Accountable Care Organizations (ACOs) are an example of alternative payment models that are becoming increasingly common in our healthcare system. ACOs focus on increasing value through cost reduction and improved outcomes, and historically focus on Medicare patients within primary care practices. As ACOs grow, attention will likely turn to costly subspecialty care as an area for improvement and standardization. This brief communication addresses the potential benefits and consequences of ACOs on Gynecologic Oncologists and for patients with gynecologic malignancies.

Health Care Crisis by the Numbers

We summarize recent data on health and health care in the United States. Many millions suffer financial distress due to medical bills and forego needed care because of costs. Pay-for-performance programs have failed to achieve the results promised and in some cases have backfired. Health care firms expend huge amounts on marketing that provides no benefit to patients. Millions of health care workers, particularly women of color, are so poorly paid that they live in poverty, and gender-based pay inequities remain common in the health sector. Polls continue to show strong popular support for a single-payer reform, but politicians continue to resist it.

Performance in the Medicare Shared Savings Program After Accounting for Nonrandom Exit: An Instrumental Variable Analysis

BACKGROUND

Accountable care organizations (ACOs) in the Medicare Shared Savings Program (MSSP) are associated with modest savings. However, prior research may overstate this effect if high-cost clinicians exit ACOs.

OBJECTIVE

To evaluate the effect of the MSSP on spending and quality while accounting for clinicians' nonrandom exit.

DESIGN

Similar to prior MSSP analyses, this study compared MSSP ACO participants versus control beneficiaries using adjusted longitudinal models that accounted for secular trends, market factors, and beneficiary characteristics. To further account for selection effects, the share of nearby clinicians in the MSSP was used as an instrumental variable. Hip fracture served as a falsification outcome. The authors also tested for compositional changes among MSSP participants.

SETTING

Fee-for-service Medicare, 2008 through 2014.

PATIENTS

A 20% sample (97 204 192 beneficiary-quarters).

MEASUREMENTS

Total spending, 4 quality indicators, and hospitalization for hip fracture.

RESULTS

In adjusted longitudinal models, the MSSP was associated with spending reductions (change, -$118 [95% CI, -$151 to -$85] per beneficiary-quarter) and improvements in all 4 quality indicators. In instrumental variable models, the MSSP was not associated with spending (change, $5 [CI, -$51 to $62] per beneficiary-quarter) or quality. In falsification tests, the MSSP was associated with hip fracture in the adjusted model (-0.24 hospitalizations for hip fracture [CI, -0.32 to -0.16 hospitalizations] per 1000 beneficiary-quarters) but not in the instrumental variable model (0.05 hospitalizations [CI, -0.10 to 0.20 hospitalizations] per 1000 beneficiary-quarters). Compositional changes were driven by high-cost clinicians exiting ACOs: High-cost clinicians (99th percentile) had a 30.4% chance of exiting the MSSP, compared with a 13.8% chance among median-cost clinicians (50th percentile).

LIMITATION

The study used an observational design and administrative data.

CONCLUSION

After adjustment for clinicians' nonrandom exit, the MSSP was not associated with improvements in spending or quality. Selection effects-including exit of high-cost clinicians-may drive estimates of savings in the MSSP.

PRIMARY FUNDING SOURCE

Horowitz Foundation for Social Policy, Agency for Healthcare Research and Quality, and National Institute on Aging.