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ACO model challenges Medicare: study

April 21, 2014
by Lois A. Bowers, Senior Editor
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The accountable care organization (ACO) model is presenting organizational accountability challenges to Medicare, finds a new study by J. Michael McWilliams, MD, PhD, of Harvard Medical School and Brigham and Women’s Hospital, Boston, and colleagues published in JAMA Internal Medicine. A solution, according to a related commentary, may be to provide incentives for each beneficiary to select an ACO and use its providers for care.

The practice that ACOs do not restrict choice of healthcare providers for Medicare beneficiaries could weaken incentives and undermine ACO efforts to manage care, the study authors say. Medicare beneficiaries are not required to pick a primary care physician either, they add, so Medicare uses utilization rates to assign people to ACOs.

Studying more than 520,000 beneficiaries enrolled in traditional Medicare in 2010 and 2011 and assigned to one of 145 ACOs, the researchers found that two-thirds of the Medicare beneficiaries assigned to an ACO in 2010 or 2011 were assigned to the same ACO in both years. Those who weren’t, however, included people in high-cost categories, such as those with end-stage renal disease, disabilities and Medicaid coverage.

Among ACO-assigned beneficiaries, 8.7 percent of office visits with primary care physicians and 66.7 percent of office visits with specialists occurred outside of the assigned ACO. About 38 percent of the Medicare spending on outpatient care billed by ACO physicians was devoted to assigned beneficiaries.

The results “suggest distinct challenges in achieving organizational accountability,” according to the researchers.

In a related commentary, Paul B. Ginsburg, PhD, of the University of Southern California, Los Angeles, says that the lack of incentives for Medicare beneficiaries to choose an ACO or commit to its providers “may severely undermine the potential of this approach to improve care and control costs.”

He adds: “The results of the study by McWilliams and colleagues confirm the seriousness of failing to link Medicare beneficiaries with ACOs. By creating a formal and mutually acknowledged relationship between ACOs and beneficiaries, healthcare provider organizations that make the investments needed to coordinate care, manage chronic diseases and manage population health would be more likely to succeed.”

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