challenge for the leaders of accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP), revealing that attributed patients’ ongoing use of out-of-network primary care remains a significant stumbling block to achieving actual long-term savings in the program.
The article, entitled “Out-Of-Network Primary care Is Associated With Higher Per Beneficiary Spending in Medicare ACOs,” was authored by a team of healthcare policy researchers: Sunny C. Lin, Phyllis L. Yan, Nicolas M. Moloci, Emily J. Lawton, Andrew M. Ryan, Julia Adler-Milstein, and John M. Hollingsworth.
The authors write that, “Despite expectations that Medicare accountable care organizations (ACOs) would curb healthcare spending, their effect has been modest. One possible explanation is that ACOs’ inability to prohibit out-of-network care limits their control over spending. To examine this possibility, we examined the association between out-of-network care and per beneficiary spending using national Medicare data for 2012-15.”
And what did they find? “While there was no association between out-of-network specialty care and ACO spending,” the authors write, “each percentage-point increase in receipt of out-of-network primary care was associated with an increase of $10.79 in quarterly total ACO spending per beneficiary.” Further, “When we broke down total spending by place of service, we found that out-of-network primary care was associated with higher spending in outpatient, skilled nursing facility, and emergency department settings, but not inpatient settings. Our findings suggest an opportunity for the Medicare program to realize substantial savings, if policy makers developed explicit incentives for beneficiaries to seek more of their primary care within network.”
In executing their statistical analysis, the researchers scanned results on 1,604,809 unique beneficiaries, covered by hundreds of MSSP ACOs—the number growing from 114 in 2012 to 392 in 2015. “Overall,” they note, “the median level of out-of-network primary care was 8 percent … and the median level of out-of-network specialty care was 82 percent.” They note that “While overall levels remained constant across the study years… we observed variation in yearly change in out-of-network care at the ACO level.” In fact, “ACOs in the highest quartile of out-of-network primary care and those in the highest quartile of out-of-network specialty care shared certain characteristics. Compared to ACOs in the lower three quartiles, these ACOs had significantly different patient, organizational, and regional characteristics,” the authors have found. “These ACOs cared for beneficiaries who had more comorbidities, were older, and were more likely to be dually eligible and to be Black or Hispanic. They also had fewer beneficiaries and providers, were more likely to be physician-led, were less likely to have an acute care hospital, and had a larger proportion of primary care providers. They were also more likely to be located in rural areas and in areas with higher poverty levels and less educated populations.”
Importantly, the researchers note, “In light of the recent MSSP overhaul (detailed in CMS’s “Pathways to Success” rule in 2018) that will require ACOs to assume downside risk more quickly, our findings suggest that controlling the level of out-of-network primary care may be one mechanism to lower spending. Our findings also suggest that Medicare might realize more savings if all of its ACO initiatives created explicit incentives for beneficiaries to seek primary care within network. For instance, copayments could be lowered for in-network primary care services. The ACO Beneficiary Incentive Program, which allows certain ACOs to pay beneficiaries a monetary incentive to receive primary care in network, could also be expanded.”
