Becker's Hospital Review

56 CFO / FINANCE Hospital-led ACOs perform worse than those led by physicians, study finds By Morgan Haefner P hysician-led ACOs saved Medicare $256.4 million in 2015, but hospital-led ACOs actually cost the program money that same year, according to a study published in The New England Jour- nal of Medicine. The study, led by researchers from the Department of Health Care Policy at Boston-based Harvard Medical School, analyzed Medicare claims from 2009 through 2015. They compared changes in Medi- care spending for patients in physician-led versus hospital-led ACOs before and after the organizations entered the Medicare Shared Savings Program. Researchers found in physician-group ACOs, MSSP participation was linked with reducing Medicare spending. The longer physi- cian-led ACOs participated in the program, the more significant the savings. By 2015, physician-led ACOs that entered the program in 2012 saw $474 in savings per Medicare beneficiary, compared to $342 for those entering in 2013 and $156 for those entering in 2014. Comparatively, hospital-led ACOs that entered the program in 2012 only saw $169 in savings per Medicare beneficiary, which declined to $18 for the 2013 group and $88 for those entering in 2014. While spending reductions in physician-led ACOs led to $256.4 million in net savings in 2015, spending reductions in hospital-led ACOs were offset by bonus payments, costing the program money. "After three years of the MSSP, participation in shared-savings con- tracts by physician groups was associated with savings for Medicare that grew over the study period, whereas hospital-integrated ACOs did not produce savings (on average) during the same period," the researchers concluded. n CJR shows early success By Emily Rappleye H ospitals in the Comprehensive Care for Joint Replacement Model reduced aver- age Medicare payments for episodes of care by 3.3 percent or more while maintaining quality during the first performance year, ac- cording to an analysis conducted by the Lewin Group, a Falls Church, Va.-based healthcare con- sulting firm and subsidiary of Optum. Data from the first performance year — April 2016 through December 2016 — shows average total episode payments for lower extremity joint replacements under the CJR program were at least $910 less than those in the control group. An episode of care in the CJR program starts with hospitalization for the surgery and ends 90 days after discharge. This reduction in payments was observed in both elective surgeries and unplanned surgeries due to fracture. It was also observed in geographic regions with historically high and historically low payments. The program was mandatory in 67 metropolitan statistical areas. Meanwhile, hospitals were able to maintain the quality of care, measured by re- admission rates, emergency department visits and mortality rates. Hospitals largely reduced the cost of the epi- sode by using less expensive post-acute care settings. Hospitals sent fewer patients to more intensive post-acute care settings, such as inpa- tient rehabilitation facilities, and patients spent less time in skilled nursing facilities. n Medicare is driving ACO growth: 4 report findings By Emily Rappleye A COs continued to grow in size and count in 2017 and early 2018, ac- cording to an analysis from Leavitt Partners and the Accountable Care Learning Collaborative. Here are four findings from their report, pub- lished in Health Affairs: 1. ere were 1,477 ACO contracts at the end of the first quarter of 2018, spread among 1,011 ACOs. Contract counts include both public and private payer partnerships, and an ACO may have contracts with mul- tiple payers. A total of 232 new ACOs were created in 2017 and the first quarter of 2018. 2. Forty-eight percent of ACO contracts are commercial, compared to 46 percent for Medicare. Medicaid accounts for just 5 per- cent of all contracts. However, Medicaid con- tracts tend to be much larger in terms of lives covered. e average Medicaid ACO covers 43,500 patients. Comparatively, the average commercial ACO covers 24,300 lives, and the average Medicare ACO covers 17,500. 3. ACOs covered 32.7 million patients across the country — roughly 10 percent of the U.S. population. At the end of the first quarter of 2018, ACOs covered about 2 million more patients than the year prior, representing 6 percent growth. ACOs can be found nationwide — at least 2 percent of the population in every state is part of an ACO — but they are not evenly distributed between or within states. 4. Medicare was the primary driver of ACO growth through the end of the first quarter of 2018. Commercial contracts saw little growth, and Medicaid contracts declined slightly. Medicare added 76 new two-sided risk contracts alone. ese new contracts were in the Medicare Shared Sav- ings Program Tracks 1+, 2 and 3, as well as the Next Generation program. Twenty-sev- en of these contracts involved groups that had never participated in an ACO program before. e authors said they believe the Quality Payment Program, which began in 2017, drove continued interest in Medicare ACOs, especially two-sided risk contracts, as they offered a viable way to enter the pro- gram's more lucrative track. n

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