Touting $380 million in savings from the Affordable Care Act's first test of accountable care, Medicare says the pilot did well enough to expand. But it's unclear how the participants got the savings and to what extent others can replicate the success.
Dr. Patrick Conway, head of the CMS Innovation Center, and his colleagues announced the savings this week in JAMA. They detailed medical spending for Medicare patients who received care from 32 accountable care organizations during the first two years of the Innovation Center's Pioneer ACO program.
The Pioneer program started in 2012 as Medicare's most ambitious test of accountable care. The government recruited hospitals and medical groups believed to be best able to succeed. The initiative started out small, with 32 accountable care organizations, and the number has dwindled to 19 as some early participants dropped out. The latest results, however, met the Affordable Care Act's criteria for expanding payment and delivery pilots. That is, the program did not add to Medicare's budget and the quality of care did not suffer.
That's good news for federal officials, who earlier this year announced plans to aggressively expand use accountable care, bundled payments and other new payment models. Less than half of the $360 billion Medicare paid to providers in 2013 were adjusted up or down based on performance on quality, as is the case with ACOs, the Catalyst for Payment Reform reported this week.
To expand the Pioneer accountable care test, the CMS plans to incorporate the framework into a larger and growing Affordable Care Act initiative, the Medicare Shared Savings Program.
Indeed, the CMS already proposed adding an option similar to the Pioneer effort to the Shared Savings Program, which is less financially risky for participating providers. Under that proposal, hospitals and medical groups could choose contracts that look more like the ones in the Pioneer program. They would assume greater financial risks in exchange for larger potential rewards.
But how many might go that route and whether they will succeed is unclear.
“You can't conclude that the Pioneer ACO contract incentives would work for organizations that are less advanced,” said Dr. Michael McWilliams, an associate professor of healthcare policy and medicine at Harvard University.
Organizations without the same level of investment or previous experience in strategies to manage the cost of care can still make the leap, McWilliams said, but the process for them will be slow. The CMS' proposals for the Shared Savings Program would give those less sophisticated organizations more time to change than the three years allowed under current rules.
Still, the new data on the Pioneer ACOs suggest more policy changes may be needed to encourage organizations to join a possible Pioneer expansion, McWilliams said.
Savings were similar between ACOs that dropped out of the Pioneer program and those that stuck with it, which affirms the findings of a separate analysis by McWilliams and colleagues published last month. The results suggest that policy changes could enable Pioneers to more easily achieve financial rewards for savings not possible under existing rules, he said.
Nonetheless, the overall Pioneer results suggest that quality improved or at least didn't decline, even if the participants achieved only modest savings, he said.
Neither study offered more than broad clues about how some ACOs saved money.
“It's very hard to take apart the findings of a study like this,” said Stuart Guterman, vice president for Medicare and cost control for the Commonwealth Fund. “It's hard to tell what the aggregate numbers mean.”
As a group, the ACOs reduced spending on hospitalizations, which is one of the primary aims of the model.
“One thing that you would expect from a model like the ACO model is they would work harder to keep patients out of the hospital because that's where a lot of the cost is,” Guterman said.
Moreover, the CMS analysis suggests that ACOs reduced that spending by preventing initial hospital visits as opposed to reducing the number of patients who returned to the hospital soon after they were discharged. The ACOs showed no significant difference in readmissions within 30 days—for which hospitals now face penalties under the Affordable Care Act.
One perplexing result from the CMS analysis was a drop in spending for primary care office visits. Accountable care emphasizes care in lower-cost settings, chronic disease management and prevention, all of which is typically the work of primary care providers.
“I am not sure how to explain it,” Guterman said. “It's hard to tell exactly what's going on, but whatever it is, it looks like it's good."
McWilliams' analysis found an increase in outpatient spending but a shift away from care in hospital-based outpatient centers.
An independent review of Pioneers' first two years offered few insights into why primary care spending declined or what may have contributed to success among those that saved money.
Researchers with L&M Policy Research who analyzed the organizations' results said it was hard to identify strategies that helped to save money.
Including a hospital in the organization didn't make much difference, according to the L&M analysis. Nor did it matter if doctors and hospitals in the ACO used the same electronic health record. However, ACOs that saved money were more likely to offer doctors individual financial incentives or create preferred networks for referrals.