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June 19, 2014

Accountable Care Organizations: Patients Look Elsewhere for Specialty Care


A study recently published in JAMA Internal Medicine found the majority of beneficiaries assigned to an accountable care organization went outside of their assigned ACO for specialty care.

According to Becker's Hospital Review, using Medicare claims data from 2010 to 2011 and lists of physicians who participate in ACO programs, the researchers examined the proportion of patients whose assignment to an ACO in 2010 was unchanged in 2011, the proportion of office visits that occurred outside of the ACO and the proportion of Medicare outpatient spending billed by the ACO that was devoted to assigned patients.

The study made the following findings:

  • 80 percent of the beneficiaries assigned to an ACO in 2010 were assigned to the same ACO in 2011.
  • Beneficiaries with fewer conditions and office visits were more likely to have ACO assignment changes.
  • 9 percent of office visits with primary care physicians were provided outside of beneficiaries' assigned ACOs.
  • The number of beneficiaries seeking outpatient specialty care outside of their assigned ACO was greater for higher-cost beneficiaries and occurred often even among specialty-oriented ACOs.
  • 38 percent of Medicare spending on outpatient care billed by ACO physicians was for assigned beneficiaries


Study authors include J. Michael McWilliams, MD, PhD; Michael E. Chernew, PhD; Jesse B. Dalton, MA; Bruce E. Landon, MD, MBA, MSc, representing the Department of Health Care Policy at Harvard Medical School, the Division of General Internal Medicine and Primary Care at Brigham and Women's Hospital and Harvard Medical School, and the Division of General Internal Medicine and Primary Care at Beth Israel Deaconess Medical Center's Department of Medicine.

The study concludes that care patterns among beneficiaries served by ACOs suggest distinct challenges in achieving organizational accountability in Medicare. Continued monitoring of these patterns may be important to determine the regulatory need for enhancing ACOs' incentives and their ability to improve care efficiency.

In a related commentary, Paul B. Ginsburg, Ph.D., University of Southern California, Los Angeles, writes: "There is broad consensus among physicians, hospital and health insurance leaders, and policy makers to reform payment to health care providers so as to reduce the role of fee for service, which encourages high volume, and instead to use systems that reward better patient outcomes, such as bundled payments for a population or for an episode of care."

"Inspired by successful shared savings contracts between private insurers and health systems … the Affordable Care Act accelerated this movement by defining Accountable Care Organizations (ACOs), specifying how ACOs are to be paid and how they are to relate to beneficiaries. But the legislation essentially left beneficiaries out of the equation, not offering incentives to choose an ACO or to commit – even softly – to its health care providers. This absence may severely undermine the potential of this approach to improve care and control costs," Ginsburg continues.

"The results of the study by McWilliams and colleagues confirm the seriousness of failing to link Medicare beneficiaries with ACOs," Ginsburg notes.  "By creating a formal and mutually acknowledged relationship between ACOs and beneficiaries, health care provider organizations that make the investments needed to coordinate care, manage chronic diseases and manage population health would be more likely to succeed," Ginsburg concludes.

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