The Impact of Accountable Care Organizations on Post Acute Care

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PROJECT SUMMARY Accountable Care Organizations (ACOs), introduced in Medicare in 2012 following the approval of the 2010 Affordable Care Act, represent one of the most important Medicare payment policy reforms since prospective payment was introduced thirty years ago. ACOs have rapidly grown and as of April 2015 they covered approximately 8 million (15%) Medicare fee-for-service (FFS) beneficiaries. CMS has plans for continued aggressive growth over the next three years. ACOs are groups of doctors, hospitals, and other health care providers, who share responsibility for providing care to a defined group of FFS Medicare beneficiaries. The ACO payment model incentivizes value by offering providers a share of any savings they achieve relative to a spending benchmark as long as they meet certain quality standards. To date, the available evidence of the success of ACOs has focused on their financial performance and on some patient outcome measures, including potentially avoidable hospitalizations and rehospitalizations. However, there is no evidence of how ACO has impacted post-acute care (PAC), one of the fastest growing components of Medicare spending and identified in an Institute of Medicine report as the dominant driver of Medicare spending variation. Furthermore, current ACO quality benchmarks have a single PAC quality measure added in 2015 (skilled nursing facility rehospitalizations). The goal of this proposal is to study the impact of ACO growth on the use and outcomes of PAC; the spill-over effects of ACOs on the PAC use and outcomes of non- ACO FFS beneficiaries in the same market; and to identify ACO and PAC provider strategies associated with greater value—reductions in Medicare spending together with quality improvements. The proposed study will link ACO participation data, Medicare claims data and SNF, IRF and HHA assessment data across 2009-2016 to conduct a difference-in-differences person-level matched analysis that examines the impact of ACOs on PAC by pursuing the following specific aims: 1. Examine changes in PAC destinations across an episode of care associated with beneficiary ACO participation. 2. Determine the impact of ACO participation on PAC quality and outcomes. 3. Determine whether two specific ACO-implemented PAC strategies, concentration and substitution, are linked to better outcomes and lower spending; and how these strategies vary with key ACO structural characteristics. The expected outcome of this research is the first-ever national evidence of whether ACOs have improved PAC value. This study will provide comprehensive information to guide policy decisions as Medicare continues to modify ACO initiatives to incentivize value.