Association between specialist compensation and Accountable Care Organization performance

To determine if Medicare Shared Savings Program Accountable Care Organizations (ACOs) using cost reduction measures in specialist compensation demonstrated better performance.

National, cross-sectional survey data on ACOs (2013-2015) linked to public-use data on ACO performance (2014-2016).

We compared characteristics of ACOs that did and did not report use of cost reduction measures in specialist compensation and determined the association between using this approach and ACO savings, outpatient spending, and specialist visit rates.

Of 160 ACOs surveyed, 26 percent reported using cost reduction measures to help determine specialist compensation. ACOs using cost reduction in specialist compensation were more often physician-led (68.3 vs 49.6 percent) and served higher-risk patients (mean Hierarchical Condition Category score 1.09 vs 1.05). These ACOs had similar savings per beneficiary year (adjusted difference $82.6 [95% CI -77.9, 243.1]), outpatient spending per beneficiary year (-24.0 [95% CI -248.9, 200.8]), and specialist visits per 1000 beneficiary years (369.7 [95% CI -9.3, 748.7]).

Incentivizing specialists on cost reduction was not associated with ACO savings in the short term. Further work is needed to determine the most effective approach to engage specialists in ACO efforts.