But not everyone agreed that change would yield sought-after savings.
Accountable-care contracts offer financial incentives for hospitals, doctors and other providers to meet quality and savings targets for a group of patients. Providers can share in savings if they curb costs; some may also be at risk for losses if the costs instead accelerate.
Jonathan Blum, director of the CMS Center for Medicare, told reporters that officials had studied prior efforts when he announced in April the participants in the agency's Shared Savings Program, which is expected to be the CMS' broadest accountable-care initiative, with 27 ACOs and 150 applications under review.
Blum said changes made from the physician group demonstration have given officials confidence that savings and quality will improve under the Shared Savings Program.
Among the changes, Blum said the agency sought to limit risk-adjustment incentives for providers that he said eroded savings to the CMS. Risk adjustment, which reflects the severity of patients' illnesses, became a point of contention between the CMS and providers. The agency also shifted how patients are identified for quality and cost-tracking purposes to be more closely tied to primary-care doctors.
Dr. Thomas Graf, chairman of community practice for Geisinger Health System, said new methods to address risk adjustment adequately address the CMS' and providers' concerns, though he disagreed that providers unfairly benefited from prior risk-adjustment methods.
Geisinger was among the original physician demonstration participants and, he said, is considering the Shared Savings Program. The health system's plans depend on whether it can get timely and accurate data on patients' use and costs.
The shift in patient identification also applies for 32 accountable care organizations known as Pioneers, which agreed to a five-year test of payments that include bonuses and penalties.
For the University of Michigan—one of 10 in the original physician group demonstration, now a Pioneer—bonuses based on savings may be more difficult to achieve as a result, said Dr. Caroline Blaum, an internal medicine and geriatrics professor and assistant dean for clinical affairs at the university and associate director of the faculty group practice.
In the original physician group demonstration, the Michigan doctors curbed spending for complex patients, she said. But complex patients are more likely to be treated by specialists than primary-care doctors and will therefore be excluded from calculating savings and quality targets under the new policy, she said. “That is what keeps me up at nights.”
—with Rich Daly