CMS Publication Says ACOs Not Expected To Save Much Initially

Accountable care organizations likely will not curb spending much at first, according to the CMS publication Medicare and Medicaid Research Review, but researchers identified promising policies for lowering costs in the long-term, including engaging patients, using telemedicine, improving care transitions and letting non-physician providers take over some of the work from physicians. The researchers studied the physician group practice demonstration on which the Accountable Care Act based accountable care organizations.

"Judging from this demonstration experience, it is unlikely that Medicare ACOs will initially achieve large savings," the article in Medicare and Medicaid Research and Review states. "Nevertheless, ACOs paid through shared savings may be an important first step toward greater efficiency and quality in the Medicare fee-for-service program."

Most of the savings from the PGP demo, which involved 10 PGPs, came from a single organization -- "the effects for the other nine practices were distributed around zero," the article says.

The researchers write that the PGPs likely improved quality more than was measured and, had they not merely been participating in a pilot, they would have invested more in infrastructure and improved performance and cuts costs further. The PGPs were more sophisticated than many of the ACOs participating in the Medicare Shared Savings Program so on that score they could be expected to perform better than most ACOs. On the other hand, most PGPs were located in areas with already low Medicare spending so there was less to save the system. If the shared savings program attracts ACOs in high-expenditure areas, the opportunities for Medicare savings will be greater.

ACOs also might eventually save the system more money when they move to a so-called two-sided risk model that penalizes them for missing cost and quality goals. Providers are lobbying against being required to accept downside risk in the next round of three-year ACO contracts. They're also pushing for bigger bonuses, both of which could limit the program from saving as much in the near term.

However, the study found that in some areas PGPs significantly reduced the use of services and they significantly improved quality. The demonstration generated significant savings for beneficiaries with major chronic conditions who were hospitalized and were entitled to Medicare previously by disability and were now eligible because of their age.

However, contrary to a past study, the researchers found no statistically significant effects for beneficiaries dually eligible for Medicare and Medicaid. PGPs also did not reduce spending when treating patients on dialysis or those with physical disabilities.

"A qualitative analysis of the PGP demonstration implementation experience, conducted jointly by the authors and PGP staff, identified four promising opportunities for improving service delivery that can complement payment policy interventions for achieving larger Medicare savings and greater quality improvements," the researchers write.

Patient engagement. The PGPs involved patients more in what happens before doctor visits and physicians did more to help chronically ill patients manage their own care by, for example, taking their medicine properly, showing up for doctor-office visits and eating healthy food.

"The goals are to make physician visits more effective and accurate in the treatment that can be provided and to enable complementary services to be provided in a more timely fashion if reimbursement can be made available," the authors write.

Care management programs. Many of the PGPs intensified care management by telemonitoring patients and having nurses call patients regularly. ACOs are trying to get CMS to waive telemedicine rules to make it easier for providers to get paid by Medicare for telehealth services. A CMS spokesman said the agency is open to waiving restrictions for ACOs in the pioneer demonstration but the agency cannot do so for the vast majority of ACOs that are in the shared savings program.

"PGPs were also interested in exploring direct incentives, such as per-member per-month capitated reimbursement for heart failure case management, which could fund a range of non-visit services, such as telephonic nurse case management," the researchers write.

Care transitions. CMS for some time has been encouraging hospitals to pay more attention to what happens to patients following discharge, and the health law created several Medicare care transition initiatives that are outside of ACOs. However, the researchers say ACOs also should improve care transitions because ACOs are financially responsible for avoidable rehospitalizations.

Expanding the roles of non-physician providers. Also called "scope of practice," it's been difficult to convince doctors they should let non-physician providers take on more responsibilities that doctors historically have handled, such as some types of patient testing or exams.

"Physician buy-in to these efforts was sometimes a challenge, but many of the PGPs had success in implementing the new non-physician roles," the MMRR article states. "If the new roles are well-structured, and the staff well-trained, then physicians may view them as complementing the care they provide and enabling them to concentrate on the elements of care that most need their expertise." -- John Wilkerson