Understanding Medicare ACO Adoption in the Context of Market Factors.

Medicare Accountable Care Organizations (ACOs) have achieved high-quality performance and recent cost savings, but little is known about how local market conditions influence provider adoption. The authors describe physician practice participation in Medicare ACOs at the county level and use adjusted logistic regression to assess the association between ACO presence and 3 characteristics hypothesized to influence ACO formation: physician market concentration, Medicare Advantage (MA) penetration, and commercial health insurance market concentration. Analyses are repeated on urban and rural county subgroups to examine geographic differences in ACO adoption. Practice participation in ACOs grew 19% nationally from 5.4% to 6.4% of practices between 2015 to 2017, but participation lagged in the West and rural counties, the latter of which had relatively concentrated physician markets and low MA penetration. After controlling for urban location, population density, and other covariates, ACO presence in a county was independently associated with less concentrated physician markets and moderate MA penetration but not commercial insurance concentration. The evidence suggests that Medicare ACO programs have continued appeal to physician practices, but additional engagement strategies may be needed to expand adoption in rural areas. In addition, greater practice competition and MA experience may facilitate ACO adoption. These insights into the relationship between market conditions and ACO participation have important implications for policy efforts to accelerate Medicare payment transformation.

Performance And Participation Of Physicians In Year One Of Medicare's Value-Based Payment Modifier Program.

In 2015 Medicare launched the Physician Value-Based Payment Modifier program, the largest US ambulatory care pay-for-performance program to date and a precursor to the forthcoming Merit-based Incentive Payment System. In its first year, the program included practices with a hundred or more clinicians. We found that 1,010 practices met this criterion, 899 of which had at least one attributed beneficiary. Of these latter practices, 263 (29.3 percent) failed to report performance data and received a 1 percent reporting-based penalty. Of the 636 practices that reported performance data, those that elected quality tiering-voluntarily receiving performance-based penalties or bonuses-and those with high use of electronic health records had better performance on quality and costs than other practices. Practices with a primary care focus had better quality than other practices but similar costs. These findings translated into differences in the receipt of penalties and bonuses and may have implications for performance patterns under the Merit-based Incentive Payment System.