Early Performance of Accountable Care Organizations in Medicare

TLDR

In the Medicare Shared Savings Program, accountable care organizations have financial incentives to lower spending and improve quality. The authors used a quasi‑experimental difference‑in‑differences design on Medicare claims from 2009‑2013 to compare spending and quality changes before and after ACO contracts for 220 ACOs entering in 2012 or 2013 versus non‑ACO providers, adjusting for geography and beneficiary characteristics, and analyzed cohorts separately by entry time and by organizational structure. In the first full year, 2012 ACO entrants achieved a 1.4% savings of $144 per beneficiary versus controls, while 2013 entrants showed no significant savings; savings were consistently larger for independent primary‑care groups than hospital‑integrated groups, and MSSP contracts improved some quality measures but not others.

Abstract

In the Medicare Shared Savings Program (MSSP), accountable care organizations (ACOs) have financial incentives to lower spending and improve quality. We used quasi-experimental methods to assess the early performance of MSSP ACOs.Using Medicare claims from 2009 through 2013 and a difference-in-differences design, we compared changes in spending and in performance on quality measures from before the start of ACO contracts to after the start of the contracts between beneficiaries served by the 220 ACOs entering the MSSP in mid-2012 (2012 ACO cohort) or January 2013 (2013 ACO cohort) and those served by non-ACO providers (control group), with adjustment for geographic area and beneficiary characteristics. We analyzed the 2012 and 2013 ACO cohorts separately because entry time could reflect the capacity of an ACO to achieve savings. We compared ACO savings according to organizational structure, baseline spending, and concurrent ACO contracting with commercial insurers.Adjusted Medicare spending and spending trends were similar in the ACO cohorts and the control group during the precontract period. In 2013, the differential change (i.e., the between-group difference in the change from the precontract period) in total adjusted annual spending was -$144 per beneficiary in the 2012 ACO cohort as compared with the control group (P=0.02), consistent with a 1.4% savings, but only -$3 per beneficiary in the 2013 ACO cohort as compared with the control group (P=0.96). Estimated savings were consistently greater in independent primary care groups than in hospital-integrated groups among 2012 and 2013 MSSP entrants (P=0.005 for interaction). MSSP contracts were associated with improved performance on some quality measures and unchanged performance on others.The first full year of MSSP contracts was associated with early reductions in Medicare spending among 2012 entrants but not among 2013 entrants. Savings were greater in independent primary care groups than in hospital-integrated groups.