title: Variation In Accountable Care Organization Spending And Sensitivity To Risk Adjustment: Implications For Benchmarking.
abstract: Spending targets (or benchmarks) for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program must be set carefully to encourage program participation while achieving fiscal goals and minimizing unintended consequences, such as penalizing ACOs for serving sicker patients. Recently proposed regulatory changes include measures to make benchmarks more similar for ACOs in the same area with different historical spending levels. We found that ACOs vary widely in how their spending levels compare with those of other local providers after standard case-mix adjustments. Additionally adjusting for survey measures of patient health meaningfully reduced the variation in differences between ACO spending and local average fee-for-service spending, but substantial variation remained, which suggests that differences in care efficiency between ACOs and local non-ACO providers vary widely. Accordingly, measures to equilibrate benchmarks between high- and low-spending ACOs--such as setting benchmarks to risk-adjusted average fee-for-service spending in an area--should be implemented gradually to maintain participation by ACOs with high spending. Use of survey information also could help mitigate perverse incentives for risk selection and upcoding and limit unintended consequences of new benchmarking methodologies for ACOs serving sicker patients.
authors.affiliation: Sherri Rose is an assistant professor of health care policy (biostatistics) in the Department of Health Care Policy at Harvard Medical School, in Boston, Massachusetts.
authors.forename: Sherri
authors.initials: S
authors.lastname: Rose
authors.affiliation: Alan M. Zaslavsky is a professor of health care policy (statistics) in the Department of Health Care Policy at Harvard Medical School.
authors.forename: Alan M
authors.initials: AM
authors.lastname: Zaslavsky
authors.affiliation: J. Michael McWilliams (mcwilliams@hcp.med.harvard.edu) is an associate professor of health care policy and medicine in the Department of Health Care Policy at Harvard Medical School.
authors.forename: J Michael
authors.initials: JM
authors.lastname: McWilliams
mesh_terms: D060866:Accountable Care Organizations / Q000191:economics* / Q000639:trends; D000368:Aged; D000369:Aged, 80 and over; D019985:Benchmarking / Q000191:economics; D016208:Databases, Factual; D005260:Female; D019538:Health Care Surveys; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006801:Humans; D008297:Male; D006278:Medicare / Q000191:economics* / Q000706:statistics & numerical data; D012189:Retrospective Studies; D020379:Risk Adjustment / Q000191:economics*; D012680:Sensitivity and Specificity; D014481:United States
keywords: Cost of Health Care; Health Spending; Insurance; Managed Care - Medicare < Managed Care