The Rise and Risks of Medicare Advantage "Affinity Plans".

This Viewpoint discusses the proliferation of Medicare Advantage plans targeting specific groups of individuals and whether these plans will improve quality of care for beneficiaries.

Hospital Facility Prices Declined As A Result Of Oregon's Hospital Payment Cap.

Hospital prices for commercially insured people are high and vary widely, prompting states to seek ways to control hospital price growth. In October 2019, the Oregon state employee health insurance plan instituted a cap on hospital payments. Using 2014-21 data from the Oregon All Payer All Claims Reporting Program database, we performed a difference-in-differences analysis to test the impact of the cap on hospital facility prices for Oregon's state employee plan enrollees. We found that the cap was not associated with a significant reduction in inpatient facility prices across the post period (-$901.9 per admission) but was associated with a significant reduction in the second year after implementation (-$2,774.20). The cap was associated with a significant reduction in outpatient facility prices over the course of the first twenty-seven months of the policy (-$130.50 per procedure). We estimated $107.5 million (or 4 percent of total plan spending) in savings to the state employee plan during the first two years. The hospital payment cap successfully reduced hospital prices for enrollees in that plan.

Association Between the Medicare Advantage Quartile Adjustment System and Plan Behavior and Enrollment.

Importance: Medicare Advantage (MA) has grown in popularity, but critics believe that insurers are overpaid, partially due to the quartile adjustment system that determines plan benchmarks. However, elimination of the quartile adjustments may be associated with less generous benefits and fewer plan offerings, which could slow MA enrollment growth. Objective: To examine whether the quartile adjustment system is associated with differences in county-level benefits, insurer offerings, and MA enrollment. Design, Setting, and Participants: The quartile adjustments create discontinuous jumps in county-level base payments based on historical traditional Medicare spending. Data from January 2017 to December 2021 and a regression discontinuity design were used to examine changes in insurer behavior and MA enrollment between quartiles. The analytic sample included 1557 county observations. Main Outcomes and Measures: Study outcomes included monthly premiums, the share of plans charging premiums, primary care copayments, the share of plans using rebates to reduce Part B premiums, supplemental benefits, plan and contract availability, and MA enrollment. Results: Discontinuities were found in the quartile adjustments and benchmarks. A 1-percentage point (pp) increase in the quartile adjustment was associated with a $6.36 increase in monthly benchmarks (95% CI, 5.10-7.62), a $0.51 decrease in monthly premiums (95% CI, -0.96 to -0.07), and a 0.68 pp decrease in the share of plans charging premiums (95% CI, -1.25 to -0.10). Significant changes were not found in primary care copayments (-$0.04; 95% CI, -0.17 to 0.09), the share of plans using rebates to reduce Part B premiums (-0.17 pp; 95% CI, -0.34 to 0.01), supplemental benefits (eg, preventive dental coverage; 0.17 pp; 95% CI, -0.25 to 0.0), the number of plans (1.06; 95% CI, -3.44 to 5.57) or contracts (0.31; 95% CI, -0.18 to 0.81), or the MA enrollment rate (0.16 pp; 95% CI, -0.61 to 0.94). Conclusions and Relevance: The study results suggest that MA plans are not very sensitive to modest changes in payment rates. Modifications to the quartile adjustment system may generate savings without substantially affecting MA beneficiaries.

Heterogeneity within the Oregon Health Insurance Experiment: An application of causal forests.

Existing evidence regarding the effects of Medicaid expansion, largely focused on aggregate effects, suggests health insurance impacts some health, healthcare utilization, and financial hardship outcomes. In this study we apply causal forest and instrumental forest methods to data from the Oregon Health Insurance Experiment (OHIE), to explore heterogeneity in the uptake of health insurance, and in the effects of (a) lottery selection and (b) health insurance on a range of health-related outcomes. The findings of this study suggest that the impact of winning the lottery on the health insurance uptake varies among different subgroups based on age and race. In addition, the results generally coincide with findings in the literature regarding the overall effects: lottery selection (and insurance) reduces out-of-pocket spending, increases physician visits and drug prescriptions, with little (short-term) impact on the number of emergency department visits and hospital admissions. Despite this, we detect quite weak evidence of heterogeneity in the effects of the lottery and of health insurance across the outcomes considered.

Hospital-physician integration and clinical volume in traditional Medicare.

OBJECTIVE: To test the effect of hospital-physician integration on primary care physicians' (PCP) clinical volume in traditional Medicare. DATA SOURCES AND STUDY SETTING: Nationwide retrospective longitudinal study using Medicare claims and other data sources from 2010 to 2016. STUDY DESIGN: We identified 70,000 PCPs, some of whom remained non-integrated and some who became hospital-integrated during this study period. We used an event study design to identify the effect of integration on key measures of physicians' clinical volume, including the number of claims, work-relative value units (RVUs), professional revenue generated, number of patients treated, and facility fee revenue generated. PRINCIPAL FINDINGS: Per-physician clinical volume declined by statistically and economically significant margins. Relative to the comparison group who remained non-integrated, work RVUs fell by 7% (95% confidence interval [CI]: -8.6% to -5.5%); the number of patients treated fell by 4% (95% CI: -5.8% to -2.6%); and claims volume among PCPs who became hospital-integrated fell by over 15% (95% CI: -16.8% to -13.5%). Though professional revenue declined by $29,165 (95% CI: -$32,286 to -$26,044), this loss was almost entirely offset by increased facility fee revenue of $28,556 (95% CI: 26,909 to 30,203). CONCLUSIONS: Hospital-physician integration may affect the quantity of clinical services delivered by PCPs to traditional Medicare beneficiaries. Reductions in clinical volume associated with integration may have long-term consequences for the supply of physician services and patient access to primary care. Future research on physician time use and patient access following hospital integration would further add to the evidence base.

Estimated Savings From the Medicare Shared Savings Program.

Importance: The Medicare Shared Savings Program (MSSP) is the largest and most important alternative payment model that has been implemented by the Centers for Medicare & Medicaid Services (CMS). Its budgetary impact to CMS is not well understood. Objective: To evaluate the association between the MSSP and net savings to CMS for performance years 2013 to 2021. Design, Setting, and Participants: The economic evaluation used publicly reported data on the MSSP from April 1, 2012, to December 31, 2021, and estimates extracted from 2 prior studies. Main Outcomes and Measures: Net savings to CMS, calculated as the difference between incentive payments to MSSP accountable care organizations and gross spending reductions. Incentive payments were calculated using the publicly reported data. The association of the MSSP with gross medical spending in traditional Medicare was extracted from 2 prior studies. Spillovers of the MSSP to Medicare Advantage (MA) were estimated by evaluating how gross spending reductions from the MSSP impacted benchmark payments to MA plans. Savings from traditional Medicare and MA were then combined. Results: The MSSP was associated with net losses to traditional Medicare of between $584 million and $1.423 billion over the study period. Savings from MSSP-related reductions to MA benchmarks totaled between $4.480 billion and $4.923 billion. Across traditional Medicare and MA, the MSSP was associated with savings of between $3.057 billion and $4.339 billion. This represents approximately 0.075% of combined spending for traditional Medicare and MA over the study period. Conclusions and Relevance: This economic evaluation found that the MSSP was associated with net losses to traditional Medicare, net savings to MA, and overall net savings to CMS. The total budget impact of the MSSP to CMS was small and continues to be uncertain due to challenges in estimating the effects of the MSSP on gross spending, particularly in recent years.

Evaluating Educational Outcomes Using Patient Outcomes of New Surgeons Performing Partial Colectomy Compared to Cholecystectomy.

PURPOSE: Despite ongoing efforts to improve surgical education, surgical residents face gaps in their training. However, it is unknown if differences in the training of surgeons are reflected in the patient outcomes of those surgeons once they enter practice. This study aimed to compare the patient outcomes among new surgeons performing partial colectomy-a common procedure for which training is limited-and cholecystectomy-a common procedure for which training is robust. METHOD: The authors retrospectively analyzed all adult Medicare claims data for patients undergoing inpatient partial colectomy and inpatient cholecystectomy between 2007 and 2018. Generalized additive mixed models were used to investigate the associations between surgeon years in practice and risk-adjusted rates of 30-day serious complications and death for patients undergoing partial colectomy and cholecystectomy. RESULTS: A total of 14,449 surgeons at 4,011 hospitals performed 340,114 partial colectomy and 355,923 cholecystectomy inpatient operations during the study period. Patients undergoing a partial colectomy by a surgeon in their 1st vs 15th year of practice had higher rates of serious complications (5.22% [95% CI, 4.85%-5.60%] vs 4.37% [95% CI, 4.22%-4.52%]; P < .01) and death (3.05% [95% CI, 2.92%-3.17%] vs 2.83% [95% CI, 2.75%-2.91%]; P < .01). Patients undergoing a cholecystectomy by a surgeon in their 1st vs 15th year of practice had similar rates of 30-day serious complications (4.11% vs 3.89%; P = .11) and death (1.71% vs 1.70%; P = .93). CONCLUSIONS: Patients undergoing partial colectomy faced a higher risk of serious complications and death when the operation was performed by a new surgeon compared to an experienced surgeon. Conversely, patient outcomes following cholecystectomy were similar for new and experienced surgeons. More attention to partial colectomy during residency training may benefit patients.

Favorable Selection In Medicare Advantage Is Linked To Inflated Benchmarks And Billions In Overpayments To Plans.

Increases in Medicare Advantage (MA) enrollment, coupled with concerns about overpayment to plans, have prompted calls for change. Benchmark setting in MA, which determines plan payment, has received relatively little attention as an avenue for reform. In this study we used national data from the period 2010-20 to examine the relationships among unobserved favorable selection, benchmark setting, and payments to plans in MA. We found that unobserved favorable selection in MA led to underpayment to counties with lower MA penetration and overpayment to counties with higher MA penetration. Because the distribution of MA beneficiaries has shifted over time toward counties that were overpaid, we estimate that plans were overpaid by an average of $9.3 billion per year between 2017 and 2020. Changes to risk adjustment in benchmark setting could likely mitigate the impact of favorable selection in MA.

Trends in Cumulative Disenrollment in the Medicare Advantage Program, 2011-2020.

Importance: The Medicare Advantage (MA) program is rapidly growing. While previous work has found that beneficiaries with substantial health needs disenroll from plans at higher rates, the long-term frequency of disenrollment is not well understood. Objective: To compare cumulative disenrollment trends in the MA program by beneficiary and plan characteristics. Design, Setting, and Participants: This retrospective, serial cross-sectional study included beneficiaries with any MA enrollment from January 1, 2011, to December 31, 2020. Data analysis took place from September 2022 to March 2023. Exposures: Beneficiary characteristics, including race and ethnicity, length of Medicare enrollment, dual eligibility, and comorbidity burden, and contract characteristics, including vertical integration status, premium, and MA star rating. Main Outcomes and Measures: The main outcome was disenrollment from an MA contract within 5 years. Rates of cumulative disenrollment by beneficiary and contract characteristics were compared. Pearson correlation coefficients were calculated to assess the correlation between a contract's 1-year disenrollment and the contract's disenrollment over a longer period. Results: The sample included 82 377 917 beneficiaries (524 442 225 beneficiary-year observations; 56.7% female; mean [SD] age, 71.9 [10.3] years). After 1 year, 13.2% of nondually enrolled and 15.9% of dually enrolled beneficiaries had left their contract, increasing to 48.3% and 53.4%, respectively, after 5 years. Black enrollees disenrolled at the highest rates among race and ethnicity categories, with 14.8% disenrolling after 1 year and 52.6% disenrolling after 5 years. Contracts had a median disenrollment rate of 9.8% (IQR, 4.5%-19.0%) after 1 year and 56.1% (IQR, 23.1%-79.0%) after 5 years. Contracts rated 5 stars had substantially lower 5-year disenrollment rates (23.0% after 5 years compared with 41.2% for 4- to 4.5-star contracts and 67.2% for 3- to 3.5-star contracts). Disenrollment from a contract after 1 year was not well correlated with disenrollment after 5 years (r, 0.46). Conclusions and Relevance: This cross-sectional study found substantial cumulative rates of disenrollment from MA plans within 5 years between 2011 and 2020, with wide variation in 5-year disenrollment by contract. The findings suggest that evaluating long-term disenrollment rates in MA performance measures may capture different outcomes than single-year disenrollment alone.

Legislative and Regulatory Options for Improving Medicare Advantage.

The Medicare Advantage program was created to expand beneficiary choice and to reduce spending through capitated payment to private insurers. However, many stakeholders now argue that Medicare Advantage is failing to deliver on its promise to reduce spending. Three problematic design features in Medicare Advantage payment policy have received particular scrutiny: (1) how baseline payments to insurers are determined, (2) how variation in patient risk affects insurer payment, and (3) how payments to insurers are adjusted for quality performance. The authors analyze the statute underlying these three design features and explore legislative and regulatory strategies for improving Medicare Advantage. They conclude that regulatory approaches for improving risk adjustment and for recouping overpayments from risk-score gaming have the highest potential impact and are the most feasible improvement measures to implement.

Reconciliation Payments in the Bundled Payments for Care Improvement Advanced Program and Reductions in Clinical Spending Needed for CMS to Avoid Financial Losses.

This study examines the magnitude of reconciliation payments and clinical spending reductions necessary for the Centers for Medicare & Medicaid Services to break even in the first 4 performance periods of the BPCI-A (Bundled Payments for Care Improvement Advanced) program.

Association of Surgical Resident Competency Ratings With Patient Outcomes.

PURPOSE: Accurate assessment of clinical performance is essential to ensure graduating residents are competent for unsupervised practice. The Accreditation Council for Graduate Medical Education milestones framework is the most widely used competency-based framework in the United States. However, the relationship between residents' milestones competency ratings and their subsequent early career clinical outcomes has not been established. It is important to examine the association between milestones competency ratings of U.S. general surgical residents and those surgeons' patient outcomes in early career practice. METHOD: A retrospective, cross-sectional study was conducted using a sample of national Medicare claims for 23 common, high-risk inpatient general surgical procedures performed between July 1, 2015, and November 30, 2018 (n = 12,400 cases) by nonfellowship-trained U.S. general surgeons. Milestone ratings collected during those surgeons' last year of residency (n = 701 residents) were compared with their risk-adjusted rates of mortality, any complication, or severe complication within 30 days of index operation during their first 2 years of practice. RESULTS: There were no associations between mean milestone competency ratings of graduating general surgery residents and their subsequent early career patient outcomes, including any complication (23% proficient vs 22% not yet proficient; relative risk [RR], 0.97, [95% CI, 0.88-1.08]); severe complication (9% vs 9%, respectively; RR, 1.01, [95% CI, 0.86-1.19]); and mortality (5% vs 5%; RR, 1.07, [95% CI, 0.88-1.30]). Secondary analyses yielded no associations between patient outcomes and milestone ratings specific to technical performance, or between patient outcomes and composites of operative performance, professionalism, or leadership milestones ratings ( P ranged .32-.97). CONCLUSIONS: Milestone ratings of graduating general surgery residents were not associated with the patient outcomes of those surgeons when they performed common, higher-risk procedures in a Medicare population. Efforts to improve how milestones ratings are generated might strengthen their association with early career outcomes.

Evidence-Based Opioid Prescribing Guidelines and New Persistent Opioid Use After Surgery.

OBJECTIVE: Evaluate the association of evidence-based opioid prescribing guidelines with new persistent opioid use after surgery. SUMMARY BACKGROUND DATA: Patients exposed to opioids after surgery are at risk of new persistent opioid use, which is associated with opioid use disorder and overdose. It is unknown whether evidence-based opioid prescribing guidelines mitigate this risk. METHODS: Using Medicare claims, we performed a difference-in-differences study of opioid-naive patients who underwent 1 of 6 common surgical procedures for which evidence-based postoperative opioid prescribing guidelines were released and disseminated through a statewide quality collaborative in Michigan in October 2017. The primary outcome was the incidence of new persistent opioid use, and the secondary outcome was total postoperative opioid prescription quantity in oral morphine equivalents (OME). RESULTS: We identified 24,908 patients who underwent surgery in Michigan and 118,665 patients who underwent surgery outside of Michigan. Following the release of prescribing guidelines in Michigan, the adjusted incidence of new persistent opioid use decreased from 3.29% (95% CI 3.15-3.43%) to 2.51% (95% CI 2.35-2.67%) in Michigan, which was an additional 0.53 (95% CI 0.36-0.69) percentage point decrease compared with patients outside of Michigan. Simultaneously, adjusted opioid prescription quantity decreased from 199.5 (95% CI 198.3-200.6) mg OME to 88.6 (95% CI 78.7-98.5) mg OME in Michigan, which was an additional 55.7 (95% CI 46.5-65.4) mg OME decrease compared with patients outside of Michigan. CONCLUSIONS: Evidence-based opioid prescribing guidelines were associated with a significant reduction in the incidence of new persistent opioid use and the quantity of opioids prescribed after surgery.

Link for Equity, a community-engaged waitlist randomized controlled trial of a culturally responsive trauma-informed care program for BIPOC students: Design features and characteristics of baseline sample.

BACKGROUND: Link for Equity is a multi-tiered, school-based program of trauma-informed care and cultural humility designed to reduce the impact of Adverse Child Experiences among Black Indigenous and other children of color (BIPOC). This report describes the program, its trial design, and the study participants' baseline characteristics. METHODS: We designed a nested waitlist-controlled trial to evaluate Link for Equity's effectiveness in reducing school violence among BIPOC students. Three pairs of school districts, matched on suspension rates and enrollment of Black/African American, Hispanic/Latinx, and American Indian/Alaska Native children, were randomized into either an intervention or delayed intervention (waitlist control) group. A community-engaged approach guided the development of protocols. Within intervention sites, BIPOC students who screened positive for ACEs or posttraumatic stress were also randomized into an immediate and waitlist control group to receive additional one-on-one support from trained school staff. RESULTS: The trial was implemented from 2019 to 2021, which overlapped with the pandemic and civil unrest in Minnesota. At baseline, 444 staff and 188 students enrolled in the study. Over a quarter of American Indian/Alaska Native students, 18% of multiple race, 12% of Black/African American, 14% of Hispanic/Latinx students reported 4+ ACEs. Between 44 and 53% of all the BIPOC students in the study were symptomatic for PTSD. Of the enrolled students, 78.7% qualified for one-on-one Link support. CONCLUSION: We implemented a multilevel waitlist-controlled trial of Link for Equity using community-engaged methods. Despite school closures during the pandemic, the study persisted with its methods now being employed in an expanded cohort of middle schools. TRIAL REGISTRATION: ClinicalTrials.gov (NCT04026477, NCT04026490).

Bundled Payments for Care Improvement Efficacy Across 3 Common Operations.

OBJECTIVE: The aim of this study was to evaluate associations between hospital participation in Bundled Payments for Care Improvement (BPCI) and 30-day total episode and post-acute care spending for lower extremity joint replacement (LEJR), coronary artery bypass graft (CABG), and colec-tomy. SUMMARY BACKGROUND DATA: BPCI has been shown to reduce spending for LEJR episodes largely from reductions in post-acute care. However, BPCI efficacy in other common elective procedures, including CABG and colec-tomy, remains unclear. It is also unknown whether post-acute care spending reductions drive total spending reductions outside of LEJR. METHODS: Retrospective cohort study using 100% Medicare claims data to identify BPCI (312 total) and non-BPCI (1,977 total) acute care hospitals from January 1, 2010 to November 30, 2016 with Medicare-enrolled patient discharges for at least one of the following BPCI episodes: LEJR (454,369 episodes), CABG (107,307 episodes), or colectomy (73,717 episodes). Along with difference-in-differences (DiD) analysis, we constructed generalized synthetic controls in the presence of nonparallel trends to estimate associations between BPCI participation and 30-day total and post-acute care spending. RESULTS: DiD estimates indicated reduced spending for LEJR (-$541.6 [95% confidence interval (CI): -718.0 to -365.3]) and colectomy (-$582.1 [95% CI: -927.3 to -236.8]) but not CABG (-$268.9 [95% CI: -831.5 to 293.7]). Generalized synthetic control estimates indicated reduced spending for LEJR (-$795.3 [95% CI: -10,22.1 to -582.2]) but not colectomy (-$251.3 [95% CI: -997.9 to 335.2]) or CABG (-$257.8 [95% CI: -10,24.6 to 414.8]).Post-acute care comprised 42.6% of LEJR spending reductions and 53.0% of colectomy spending reductions. CONCLUSIONS: BPCI participation was associated with significant spending reductions for LEJR and colectomy but not CABG. We conclude that BPCI has episode-dependent efficacy, largely determined by post-acute care.

Out-of-pocket Costs for Commercially-insured Patients in the Years Following Bariatric Surgery: Sleeve Gastrectomy Versus Roux-en-Y Gastric Bypass.

OBJECTIVE: To compare out-of-pocket (OOP) costs for patients up to 3 years after bariatric surgery in a large, commercially-insured population. SUMMARY OF BACKGROUND DATA: More information on OOP costs following bariatric surgery may affect patients' procedure choice. METHODS: Retrospective study using the IBM MarketScan commercial claims database, representing patients nationally who underwent laparoscopic sleeve gastrectomy (SG) or Roux-en-Y gastric bypass (RYGB) January 1, 2011 to December 31, 2017. We compared total OOP costs after the surgical episode between the 2 procedures using difference-in-differences analysis adjusting for demographics, comorbidities, operative year, and insurance type. RESULTS: Of 63,674 patients, 64% underwent SG and 36% underwent RYGB. Adjusted OOP costs after SG were $1083, $1236, and $1266 postoperative years 1, 2, and 3. For RYGB, adjusted OOP costs were $1228, $1377, and $1369. In our primary analysis, SG OOP costs were $122 (95% confidence interval [CI]: -$155 to -$90) less than RYGB year 1. This difference remained consistent at -$119 (95%CI: -$158 to -$79) year 2 and -$80 (95%CI: -$127 to -$35) year 3. These amounts were equivalent to relative differences of -7%, -7%, and -5% years 1, 2, and 3. Plan features contributing the most to differences were co-insurance years 1, 2, and 3.The largest clinical contributors to differences were endoscopy and outpatient care year 1, outpatient care year 2, and emergency department use year 3. CONCLUSIONS: Our study is the first to examine the association between bariatric surgery procedure and OOP costs. Differences between procedures were approximately $100 per year which may be an important factor for some patients deciding whether to pursue SG or gastric bypass.

Comparative Safety of Sleeve Gastrectomy and Gastric Bypass up to 5 Years After Surgery in Patients With Medicaid.

OBJECTIVE: Compare adverse outcomes up to 5 years after sleeve gastrectomy and gastric bypass in patients with Medicaid. BACKGROUND: Sleeve gastrectomy is the most common bariatric operation among patients with Medicaid; however, its long-term safety in this population is unknown. METHODS: Using Medicaid claims, we performed a retrospective cohort study of adult patients who underwent sleeve gastrectomy or gastric bypass from January 1, 2012, to December 31, 2018. Instrumental variables survival analysis was used to estimate the cumulative incidence and heterogeneity of outcomes up to 5 years after surgery. RESULTS: Among 132,788 patients with Medicaid, 84,717 (63.8%) underwent sleeve gastrectomy and 48,071 (36.2%) underwent gastric bypass. A total of 69,225 (52.1%) patients were White, 33,833 (25.5%) were Black, and 29,730 (22.4%) were Hispanic. Compared with gastric bypass, sleeve gastrectomy was associated with a lower 5-year cumulative incidence of mortality (1.29% vs 2.15%), complications (11.5% vs 16.2%), hospitalization (43.7% vs 53.7%), emergency department (ED) use (61.6% vs 68.2%), and reoperation (18.5% vs 22.8%), but a higher cumulative incidence of revision (3.3% vs 2.0%). Compared with White patients, the magnitude of the difference between sleeve and bypass was smaller among Black patients for ED use [5-y adjusted hazard ratios: 1.01; 95% confidence interval (CI), 0.94-1.08 vs 0.94 (95% CI, 0.88-1.00), P <0.001] and Hispanic patients for reoperation [5-y adjusted hazard ratios: 0.95 (95% CI, 0.86-1.05) vs 0.76 (95% CI, 0.69-0.83), P <0.001]. CONCLUSIONS: Among patients with Medicaid undergoing bariatric surgery, sleeve gastrectomy was associated with a lower risk of mortality, complications, hospitalization, ED use, and reoperations, but a higher risk of revision compared with gastric bypass. Although the difference between sleeve and bypass was generally similar among White, Black, and Hispanic patients, the magnitude of this difference was smaller among Black patients for ED use and Hispanic patients for reoperation.

Association of Medicare Beneficiary and Hospital Accountable Care Organization Alignment With Surgical Cost Savings.

Importance: Although Medicare accountable care organizations (ACOs) account for half of program expenditures, whether ACOs are associated with surgical spending warrants further study. Objective: To assess whether greater beneficiary-hospital ACO alignment was associated with lower surgical episode costs. Design, Setting, and Participants: This retrospective cohort study was conducted between 2020 and 2022 using US Medicare data from a 20% random sample of beneficiaries. Individuals 18 years of age and older and without kidney failure who had a surgical admission between 2008 and 2015 were included. For each study year, distinction was made between beneficiaries assigned to an ACO and those who were not, as well as between admissions to ACO-participating and nonparticipating hospitals. Exposures: Time-varying binary indicators for beneficiary ACO assignment and hospital ACO participation and an interaction between them. Main Outcomes and Measures: Ninety-day, price-standardized total episode payments. Multivariable 2-way fixed-effects models were estimated. Results: During the study period, 2 797 337 surgical admissions (6% of which involved ACO-assigned beneficiaries) occurred at 3427 hospitals (17% ACO participating). Total Medicare payments for 90-day surgical episodes were lowest when ACO-assigned beneficiaries underwent surgery at a hospital participating in the same ACO as the beneficiary ($26 635 [95% CI, $26 426-$26 844]). The highest payments were for unassigned beneficiaries treated at participating hospitals ($27 373 [95% CI, $27 232-$27 514]) or nonparticipating hospitals ($27 303 [95% CI, $27 291-$27 314]). Assigned beneficiaries treated at hospitals participating in a different ACO and assigned beneficiaries treated at nonparticipating hospitals had similar payments (for participating hospitals, $27 003 [95% CI, $26 739-$27 267] and for nonparticipating hospitals, $26 928 [95% CI, $26 796-$27 059]). A notable factor in the observed differences in surgical episode costs was lower spending on postacute care services. Conclusions and Relevance: In this cohort study evaluating hospital and beneficiary ACO alignment and surgical spending, savings were noted for beneficiaries treated at hospitals in the same ACO. Allowing ACOs to encourage or require surgical procedures in their own hospitals could lower Medicare spending on surgery.