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Area of Science:

  • Health Policy
  • Health Economics
  • Healthcare Management

Background:

  • Medicare Shared Savings Program (MSSP) benchmarks previously favored historical spending, potentially disadvantaging efficient Accountable Care Organizations (ACOs).
  • Evolving benchmark calculations, including regional spending adjustments in 2017, aimed to better reward ACO efficiency.
  • The impact of these benchmarking policy changes on ACO financial performance across efficiency levels remained unclear.

Purpose of the Study:

  • To assess the association between an ACO's initial efficiency and its likelihood of earning shared savings bonuses.
  • To determine how the 2017 regional benchmark adjustment influenced this association.

Main Methods:

  • Cross-sectional study using a 20% national sample of Medicare claims from 2013-2020.
  • ACOs were categorized into quartiles based on their initial observed-to-expected spending ratio (efficiency).
  • Multivariable logistic regression analyzed the relationship between efficiency quartiles, shared savings bonuses, and the impact of the 2017 policy change.

Main Results:

  • Across 402 ACOs, the median spending ratio was 1.000.
  • The most efficient ACOs showed an increased probability of earning bonuses after the 2017 adjustment (24.4% to 45.2%).
  • However, the least efficient ACOs consistently had significantly higher odds of earning bonuses both before (43.8%) and after (60.7%) the policy change, with no narrowing of this gap.

Conclusions:

  • ACOs across the efficiency spectrum had improved odds of earning bonuses post-2017 regional adjustment.
  • Less efficient ACOs consistently demonstrated significantly greater odds of earning bonuses compared to more efficient ACOs.
  • Current benchmarking policies in the MSSP may not adequately incentivize or reward higher levels of ACO efficiency.