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.

Dually Enrolled Beneficiaries Have Higher Episode Costs On The Medicare Spending Per Beneficiary Measure.

Cost measures are a growing part of Medicare's value-based payment programs. Medicare Spending per Beneficiary (MSPB) is the cost measure included in Medicare's Hospital Value-Based Purchasing (VBP) Program. Beneficiaries who are dually enrolled in Medicare and Medicaid are known to have higher spending on care, but it is unknown whether spending on the MSPB measure varies based on dual enrollment and whether this has implications for the performance of safety-net hospitals. We found that after adjustment for comorbidities, dually enrolled beneficiaries had 4.3 percent higher spending, which was primarily driven by higher costs in the postacute setting associated with use of institutional postacute care. Hospitals in the highest quintile of the disproportionate share hospital index had poorer performance on the MSPB measure, and were more likely to be penalized under VBP. After adjustment for dual status, differences in MSPB performance between safety-net and non-safety-net hospitals were no longer significant. This suggests that differences in performance between the two types of hospitals were driven at least in part by differences in their patient populations. However, overall VBP payment impacts were largely unchanged after the MSPB measure was adjusted for dual-enrollment status.

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.

Examining Measures of Income and Poverty in Medicare Administrative Data.

Disparities by economic status are observed in the health status and health outcomes of Medicare beneficiaries. For health services and health policy researchers, one barrier to addressing these disparities is the ability to use Medicare data to ascertain information about an individual's income level or poverty, because Medicare administrative data contains limited information about individual economic status. Information gleaned from other sources-such as the Medicaid and Supplemental Security Income programs-can be used in some cases to approximate the income of Medicare beneficiaries. However, such information is limited in its availability and applicability to all beneficiaries. Neighborhood-level measures of income can be used to infer individual-level income, but level of neighborhood aggregation impacts accuracy and usability of the data. Community-level composite measures of economic status have been shown to be associated with health and health outcomes of Medicare beneficiaries and may capture neighborhood effects that are separate from individual effects, but are not readily available in Medicare data and do not serve to replace information about individual economic status. There is no single best method of obtaining income data from Medicare files, but understanding strengths and limitations of different approaches to identifying economic status will help researchers choose the best method for their particular purpose, and help policymakers interpret studies using measures of income.

Association of Practice-Level Social and Medical Risk With Performance in the Medicare Physician Value-Based Payment Modifier Program.

Importance: Medicare recently launched the Physician Value-Based Payment Modifier (PVBM) Program, a mandatory pay-for-performance program for physician practices. Little is known about performance by practices that serve socially or medically high-risk patients. Objective: To compare performance in the PVBM Program by practice characteristics. Design, Setting, and Participants: Cross-sectional observational study using PVBM Program data for payments made in 2015 based on performance of large US physician practices caring for fee-for-service Medicare beneficiaries in 2013. Exposures: High social risk (defined as practices in the top quartile of proportion of patients dually eligible for Medicare and Medicaid) and high medical risk (defined as practices in the top quartile of mean Hierarchical Condition Category risk score among fee-for-service beneficiaries). Main Outcomes and Measures: Quality and cost z scores based on a composite of individual measures. Higher z scores reflect better performance on quality; lower scores, better performance on costs. Results: Among 899 physician practices with 5 189 880 beneficiaries, 547 practices were categorized as low risk (neither high social nor high medical risk) (mean, 7909 beneficiaries; mean, 320 clinicians), 128 were high medical risk only (mean, 3675 beneficiaries; mean, 370 clinicians), 102 were high social risk only (mean, 1635 beneficiaries; mean, 284 clinicians), and 122 were high medical and social risk (mean, 1858 beneficiaries; mean, 269 clinicians). Practices categorized as low risk performed the best on the composite quality score (z score, 0.18 [95% CI, 0.09 to 0.28]) compared with each of the practices categorized as high risk (high medical risk only: z score, -0.55 [95% CI, -0.77 to -0.32]; high social risk only: z score, -0.86 [95% CI, -1.17 to -0.54]; and high medical and social risk: -0.78 [95% CI, -1.04 to -0.51]) (P < .001 across groups). Practices categorized as high social risk only performed the best on the composite cost score (z score, -0.52 [95% CI, -0.71 to -0.33]), low risk had the next best cost score (z score, -0.18 [95% CI, -0.25 to -0.10]), then high medical and social risk (z score, 0.40 [95% CI, 0.23 to 0.57]), and then high medical risk only (z score, 0.82 [95% CI, 0.65 to 0.99]) (P < .001 across groups). Total per capita costs were $9506 for practices categorized as low risk, $13 683 for high medical risk only, $8214 for high social risk only, and $11 692 for high medical and social risk. These patterns were associated with fewer bonuses and more penalties for high-risk practices. Conclusions and Relevance: During the first year of the Medicare Physician Value-Based Payment Modifier Program, physician practices that served more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs.

Elements of Program Design in Medicare's Value-based and Alternative Payment Models: a Narrative Review.

Increasing emphasis on value in health care has spurred the development of value-based and alternative payment models. Inherent in these models are choices around program scope (broad vs. narrow); selecting absolute or relative performance targets; rewarding improvement, achievement, or both; and offering penalties, rewards, or both. We examined and classified current Medicare payment models-the Hospital Readmissions Reduction Program (HRRP), Hospital Value-Based Purchasing Program (HVBP), Hospital-Acquired Conditions Reduction Program (HACRP), Medicare Advantage Quality Star Rating program, Physician Value-Based Payment Modifier (VM) and its successor, the Merit-Based Incentive Payment System (MIPS), and the Medicare Shared Savings Program (MSSP) on these elements of program design and reviewed the literature to place findings in context. We found that current Medicare payment models vary significantly across each parameter of program design examined. For example, in terms of scope, the HRRP focuses exclusively on risk-standardized excess readmissions and the HACRP on patient safety. In contrast, HVBP includes 21 measures in five domains, including both quality and cost measures. Choices regarding penalties versus bonuses are similarly variable: HRRP and HACRP are penalty-only; HVBP, VM, and MIPS are penalty-or-bonus; and the MSSP and MA quality star rating programs are largely bonus-only. Each choice has distinct pros and cons that impact program efficacy. Unfortunately, there are scant data to inform which program design choice is best. While no one approach is clearly superior to another, the variability contained within these programs provides an important opportunity for Medicare and others to learn from these undertakings and to use that knowledge to inform future policymaking.