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Medicare Shared Savings Program: Public Reporting and Shared Savings Distributions
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Medicare Shared Savings Program: Public Reporting and Shared Savings Distributions

John Schulz, BA; Matthew DeCamp, MD, PhD; and Scott A. Berkowitz, MD, MBA
Analysis of publicly reported organizational characteristics, shared savings distribution plans, and early financial success of accountable care organizations in the Medicare Shared Savings Program.
Finally, 46 plans (16% of plans with distribution plans online) explicitly referenced patients’ potential to benefit from shared savings. Furthermore, 16 (6%) referenced specific new programs that would be started to benefit patients and funded by shared savings. Examples included hiring case managers or launching educational sessions for patients.

Shared Savings Distribution Plans by ACO Type

Comparing the ACOs composed solely of PCPs to the ACOs with PCPs and specialists showed little difference in the distribution to each category (Figure 2). However, ACOs that included hospitals gave a larger average percentage to PCPs, specialists, and/or hospitals within the ACO compared with those without (69% vs 58%; P = .01).Compared with all active ACOs, ACOs with external stakeholders had a higher percentage of plans that were TBD (55% vs 18%; P <.001) and a lower percentage of plans with specific percentage allocations listed (36% vs 62%; P <.001). In addition, compared with the 152 ACOs without external stakeholders, ACOs with external stakeholders planned to give a smaller average percentage to PCPs, specialists, and/ or hospitals within the ACO (53% vs 65%; P = .04).

Shared Savings Distribution Plans and Financial Performance

No differences in the ability to generate savings were found between ACOs based on the inclusion of a hospital, AMC, or external stakeholder in the ACO.

We also calculated the proportion of ACOs that generated savings based on numbers of participating entities within an ACO (Figure 3). ACOs with 6 to 10 participating entities were the least likely to have generated savings (13%), while ACOs with more than 20 participating entities were most likely to have generated savings (37%).

No association was found between the percentage of shared savings allocated to PCPs, specialists, and/ or hospitals within the ACO versus infrastructure and the ability to generate savings. However, we found that ACOs that planned to distribute greater than 50% of shared savings to PCPs and specialists were associated with a higher probability of generating savings compared with those that did not (39% vs 22%; P = .001). Similarly, we found that ACOs that planned to distribute greater than 60% of shared savings to PCPs were more likely to have generated savings compared with those that did not (53% vs 24%; P = .01).

DISCUSSION

Our study describes the landscape of MSSP ACO shared savings distribution plans with a focus on public reporting, plan details, and the association between ACO organizational or distribution plan characteristics and ACO early financial success in generating shared savings.

Most MSSP ACOs are meeting the basic public reporting guidelines related to their shared savings distribution plans, as set forth by CMS. Nearly 85% of all 338 ACOs included basic information about distribution plans; only about half, however, included planned percentage distributions to PCPs, specialists, and/or hospitals within the ACO. ACOs with external stakeholders were less likely than other ACOs to report such details.

There are several possible explanations for this finding. First, all of the ACOs without a website were in the January 2014 start date, and these ACOs might have created websites since the study was conducted mid-year, or the websites existed but were unable to be found with normal search functions. Second, since initial public reporting guidance was issued in 2012, CMS has issued updated guidance in September 2014 that explicitly clarifies that ACOs must adhere to the reporting format of CMS.14,24

From a broader perspective, reporting of discrete percentages (as opposed to not reporting them, or reporting TBD) may or may not be equivalent to transparency. The complexity, uncertainty, and dynamic nature of an ACO’s shared savings distribution plan pose challenges for static posting online. For example, an ACO may be unable to predict all operational costs or clinical program needs in advance of applying to CMS. For such an organization to post discrete percentages—when such percentages are almost certain to change—it could actually work against the ethical value of transparency. Because at present there is little evidence regarding how different ACO stakeholders (including their patients) perceive different ways of reporting shared savings, future research could investigate how (if at all) reporting affects perceptions, trust, and buy-in to the ACO.25

We found that MSSP ACOs vary widely in their infrastructure as well as in planned shared savings allocations toward their PCPs, specialists, and/or hospitals (Figure 2). Overall, these findings are consistent with the intent of CMS MSSP regulations, which give ACOs flexibility to determine distribution plans tailored to a particular ACO’s needs for meeting program goals

We also found several notable associations between ACO characteristics and distribution plans. First, ACOs that included a hospital planned to allocate a larger percentage of shared savings to PCPs, specialists, and/or hospitals within the ACO compared with ACOs without hospitals. This may be because hospitals have fewer infrastructure needs initially compared with nonhospital ACOs, but determining the exact reasons for this association requires further in-depth study.26-28 Second, ACOs involving external investors or organizations planned to give a smaller percentage of shared savings to the ACO’s PCPs, specialists, and/or hospitals. This could be for several reasons: some savings might need to be distributed to the investors, leaving a lesser share available for participating entities; or alternatively, ACOs with external investors may have other financial arrangements in lieu of shared savings.29

We found few associations between ACO organizational or distribution plan characteristics and ACO early financial success. In terms of organizational characteristics, our most notable finding was that ACOs with over 20 participating entities were most likely to have generated savings (Figure 3). Although not statistically significant (perhaps due to the low number of ACOs examined), there appeared to be a U-shaped relationship, whereby ACOs with 6 to 10 participating entities were least likely to have generated savings. The reasons for this may be complex. For ACOs with fewer participating entities, greater control over care delivery may make it easier to implement new programs and care patterns necessary for success. For larger ACOs, ACO participating entity number could be a proxy for ACO size (in terms of patient number or diversity) or for operational complexity in functioning in an aligned manner. This finding merits further in-depth investigation.

In terms of other ACO characteristics, we found that ACOs distributing the majority of their savings to PCPs and specialists were more likely to have generated savings in their first operational year. No association existed between the generation of savings and amounts allocated to specialists, but ACOs distributing over 60% of savings to PCPs were more likely to have generated savings.

While these findings are not necessarily causal, intuitively, a greater potential monetary reward for individual clinicians, if well advertised to the participating provider community, could help incentivize behavior change and generate buy-in to the overall goals of the ACO. It is possible that specific distribution thresholds may play a factor in altered perceptions of individual providers. For example, individual clinicians may not change their behavior in response to a 10% or 30% distribution, but once the allocation rises above a certain threshold, they may be more willing to change their behavior. While robust relationships have yet to be established, preliminary data suggest that in order to generate savings, ACOs should consider allocating significant percentages of savings to providers, specifically PCPs.

Limitations

Our study had limitations. First, all data were based upon publicly available information at the time of our study. Data were not verified with the 338 ACOs examined, and shared savings plan characteristics may change over time. Second, as our results show, only 176 (52%) of the 338 ACOs publicly reported specific percentage distributions to PCPs, specialists, and/or hospitals within the ACO. Distribution plans without this detail may differ, limiting our ability to make generalizable or detailed claims about how ACOs are using shared savings. This, as well as heterogeneity in data reporting, also prevented us from conducting regression analyses; as more data emerge, these could be considered in the future.

CONCLUSIONS

By examining publicly reported shared savings distribution plans of MSSP ACOs, we have described for the first time the landscape of how MSSP ACOs report and plan to use their shared savings. Most ACOs are meeting CMS reporting guidelines, but many are not reporting detailed characteristics of their planned shared savings allocations. Allocations of those that do report, vary widely. We found that ACOs that planned to distribute a majority of their savings to providers were more likely to have generated savings, as were ACOs with larger (>10) numbers of participating entities. However, no 1 common path yet exists for ACOs in terms of shared savings uses. Our findings, while preliminary, generate important hypotheses for future research. As ACOs evolve, it will be critical to continue examining how different stakeholders perceive shared savings distribution plan reporting and whether certain distribution plan characteristics may be associated with ACO success or failure.

Author Affiliations: Johns Hopkins University School of Medicine (JS), Baltimore, MD; Berman Institute of Bioethics and Division of General Internal Medicine, Johns Hopkins University (MD), Baltimore, MD; Department of Medicine (Cardiology) and Office of Johns Hopkins Physicians (Accountable Care), Johns Hopkins University (SAB), Baltimore, MD; and Johns Hopkins Medicine Alliance for Patients, LLC (SAB), Baltimore, MD.

Source of Funding: Dr DeCamp’s work on this manuscript was funded by grant 1K08HS023684 from the Agency for Healthcare Research and Quality.

Author Disclosures: Dr Berkowitz is the executive director for Johns Hopkins Medicine Alliance for Patients, LLC, the Johns Hopkins Medicine accountable care organization. The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (JS, MD, SAB); acquisition of data (JS); analysis and interpretation of data (JS, MD, SAB); drafting of the manuscript (JS, MD); critical revision of the manuscript for important intellectual content (JS, SAB); statistical analysis (JS); and supervision (SAB).

Address correspondence to: Scott A. Berkowitz, MD, MBA, 733 North Broadway, Miller Research Building G46, Baltimore, MD 21205. E-mail: sberkow3@jhmi.edu.
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