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The American Journal of Managed Care May 2018
Impact of Emergency Physician–Provided Patient Education About Alternative Care Venues
Pankaj B. Patel, MD; David R. Vinson, MD; Marla N. Gardner, BA; David A. Wulf, BS; Patricia Kipnis, PhD; Vincent Liu, MD, MS; and Gabriel J. Escobar, MD
Monitoring the Hepatitis C Care Cascade Using Administrative Claims Data
Cheryl Isenhour, DVM, MPH; Susan Hariri, PhD; and Claudia Vellozzi, MD, MPH
Delivery of Acute Unscheduled Healthcare: Who Should Judge Whether a Visit Is Appropriate (or Not)?
Adam Sharp, MD, MSc, and A. Mark Fendrick, MD
Impact of Formulary Restrictions on Medication Intensification in Diabetes Treatment
Bruce C. Stuart, PhD; Julia F. Slejko, PhD; Juan-David Rueda, MD; Catherine E. Cooke, PharmD; Xian Shen, PhD; Pamela Roberto, PhD; Michael Ciarametaro, MBA; and Robert Dubois, MD
Characteristics and Medication Use of Veterans in Medicare Advantage Plans
Talar W. Markossian, PhD, MPH; Katie J. Suda, PharmD, MS; Lauren Abderhalden, MS; Zhiping Huo, MS; Bridget M. Smith, PhD; and Kevin T. Stroupe, PhD
Rural Hospital Transitional Care Program Reduces Medicare Spending
Keith Kranker, PhD; Linda M. Barterian, MPP; Rumin Sarwar, MS; G. Greg Peterson, PhD; Boyd Gilman, PhD; Laura Blue, PhD; Kate Allison Stewart, PhD; Sheila D. Hoag, MA; Timothy J. Day, MSHP; and Lorenzo Moreno, PhD
Understanding Factors Associated With Readmission Disparities Among Delta Region, Delta State, and Other Hospitals
Hsueh-Fen Chen, PhD; Adrienne Nevola, MPH; Tommy M. Bird, PhD; Saleema A. Karim, PhD; Michael E. Morris, PhD; Fei Wan, PhD; and J. Mick Tilford, PhD
Currently Reading
Changes in Specialty Care Use and Leakage in Medicare Accountable Care Organizations
Michael L. Barnett, MD, MS, and J. Michael McWilliams, MD, PhD
Nevada's Medicaid Expansion and Admissions for Ambulatory Care–Sensitive Conditions
Olena Mazurenko, MD, PhD; Jay Shen, PhD; Guogen Shan, PhD; and Joseph Greenway, MPH
Introduction of Cost Display Reduces Laboratory Test Utilization
Kim Ekblom, MD, PhD, and Annika Petersson, MSc, PhD

Changes in Specialty Care Use and Leakage in Medicare Accountable Care Organizations

Michael L. Barnett, MD, MS, and J. Michael McWilliams, MD, PhD
Reducing specialty leakage is promoted as crucial for accountable care organizations (ACOs). This study finds that Medicare ACOs had modest reductions in specialty use and minimal changes in leakage.

Objectives: Reducing leakage to outside specialists has been promoted as a key strategy for accountable care organizations (ACOs). We sought to examine changes in specialty care leakage and use associated with the Medicare Shared Savings Program (MSSP).

Study Design: Analyses of trends in ACOs from 2010 to 2014 and quasi-experimental difference-in-differences analyses comparing changes for ACOs versus local non-ACO providers from before until after the start of ACO contracts, stratified by ACO specialty composition and year of MSSP entry.

Methods: We used Medicare claims for a 20% sample of beneficiaries attributed to ACOs or non-ACO providers. The main beneficiary-level outcome was the annual count of new specialist visits. ACO-level outcomes included the proportion of visits for ACO-attributed patients outside of the ACO (leakage) and proportion of ACO Medicare outpatient revenue devoted to ACO-attributed patients (contract penetration).

Results: Leakage of specialist visits decreased minimally from 2010 to 2014 among ACOs. Contract penetration also changed minimally but differed substantially by specialty composition (85% for the most primary care–oriented quartile vs 47% for the most specialty-oriented quartile). For the most primary care–oriented quartile of ACOs in 2 of 3 entry cohorts, MSSP participation was associated with differential reductions in new specialist visits (–0.04 visits/beneficiary in 2014 for the 2012 cohort; –5.4%; P <.001). For more specialty-oriented ACOs, differential changes in specialist visits were not statistically significant.

Conclusions: Leakage of specialty care changed minimally in the MSSP, suggesting ineffective efforts to reduce leakage. MSSP participation was associated with decreases in new specialty visits among primary care–oriented ACOs.

Am J Manag Care. 2018;24(5):e141-e149
Takeaway Points

In this study, we examined how patterns of specialty care use changed in Medicare accountable care organizations (ACOs). We found that:
  • Patient use of specialists outside of specialty-oriented ACOs (leakage) decreased only slightly over time.
  • Primary care–oriented ACOs achieved up to a 5% reduction in new specialist visits after 3 years of Medicare Shared Savings Program participation.
  • Meanwhile, changes in specialist visits were minimal for more specialty-oriented ACOs.
  • These findings suggest that there has been limited internalization of specialty care in Medicare ACOs and challenge the notion that providing the full spectrum of care and containing leakage are keys to more efficient use of specialty care.
In Medicare accountable care organization (ACO) programs, provider organizations have incentives to reduce spending and improve quality of care.1 Specifically, providers share in savings with Medicare if they keep spending for an attributed population of beneficiaries sufficiently below a financial benchmark, with greater shares given to providers performing better on a set of quality measures. Initial evidence examining savings in ACO programs has found modest overall spending reductions, with larger reductions achieved in areas where spending is thought to be wasteful, such as postacute care, and where savings can be achieved by steering patients toward lower-priced settings, such as independent office settings instead of hospital outpatient departments.2,3 With the exception of meaningful improvements in patient experiences,4 the Medicare ACO programs have been associated with only minimal improvement in performance on quality measures, including medication adherence, readmissions, and admissions for ambulatory care–sensitive conditions.2,3,5-9

Although ACOs have incentives to lower spending by any means, and despite the lack of evidence of savings from quality improvement, ACO descriptions and efforts have largely focused on care coordination and management as primary strategies to achieve savings.1,10-17 Accordingly, many ACOs have tried to establish control over the full continuum of patients’ care by leveraging ownership structures that encompass primary, specialty, and inpatient care and by minimizing the proportion of care that their patients receive from other providers, commonly called leakage.

A sizable industry has grown offering products specifically to help ACOs reduce leakage, particularly by controlling specialty referrals,18-20 and many ACOs in the Medicare Shared Savings Program (MSSP) have cited leakage reduction as the key to ACO success.21,22 Limiting leakage may be challenging in the Medicare ACO model because ACO-attributed beneficiaries continue to have unrestricted choice of providers. Whether specialty care leakage has been reduced in Medicare ACOs has not been described.

ACOs that consist mostly or entirely of primary care providers (PCPs) leak all or almost all specialty care by construction but have successfully lowered Medicare spending as much as or more than other ACOs have, on average.2,23 Although these primary care–oriented ACOs cannot provide the full continuum of care, they have stronger incentives than other ACOs to reduce the use of specialty care, because shared savings bonuses from reducing use of specialty services are not offset by foregone fee-for-service (FFS) profits from providing less specialty care. Because many specialty referrals are thought to be unnecessary and lead to significant downstream spending, they may be a natural focus for cost-cutting efforts by primary care–oriented ACOs.24-26 Primary care–oriented ACOs also have stronger incentives than more specialty-oriented ACOs to implement system changes that affect all their patients, because higher shares of their revenue are covered by ACO contracts (ie, they have higher ACO “contract penetration”).27-29

In contrast, large multispecialty ACOs provide specialty care to many patients who are not covered by the organization’s ACO contracts and would incur substantial FFS losses from systematically reducing referrals to specialists. Likewise, specialty-oriented ACOs may seek to contain leakage to boost FFS revenue for specialty services, rather than to coordinate care, particularly as competing organizations seek to internalize their own referrals or steer patients to lower-priced specialists.

Thus, an ACO’s specialty composition is likely a major determinant of the incentives it faces and the strategies it employs to lower spending. Using Medicare claims from 2010 to 2014, we examined trends in leakage of specialty care and contract penetration among ACOs in the MSSP, with a focus on specialty-oriented ACOs, to determine if their efforts to redirect patient referrals have been associated with changes in patient care patterns and contract incentives. We also assessed changes in the use of specialist visits associated with MSSP participation, comparing these changes between primary care–oriented and more specialty-oriented ACOs.


Study Data and Population

We analyzed Medicare claims and enrollment data from 2010 to 2014 for a random 20% sample of FFS Medicare beneficiaries. For each year, we included beneficiaries who were continuously enrolled in Part A and Part B of FFS Medicare in that year (while alive for decedents) and in the prior year.

To examine ACOs entering the MSSP in 2012, 2013, and 2014 (335 ACOs in total), we used the ACO provider-level research identifiable files from CMS, which define ACOs as collections of provider taxpayer identification numbers (TINs) and CMS certification numbers (for safety-net providers), and list national provider identifiers for participating physicians, as well. Using previously described methods, we attributed each beneficiary in each study year to the ACO or non-ACO TIN accounting for the most allowed charges for qualifying outpatient evaluation and management services delivered to the beneficiary by a PCP during the year.2 We limited qualifying services to office visits with PCPs because many ACOs include no or few specialty practices.2 Beneficiaries with no office visits with a PCP were excluded.

Study Variables

ACO specialty mix. We assessed the proportion of physicians in each ACO’s set of contract participants (contracting network) that were in primary care specialties (internal medicine, family medicine, general practice, and geriatrics) versus all other specialties (specialists). We assessed physicians’ primary specialty from specialty codes in Medicare claims. We categorized ACOs into quartiles based on the proportion of ACO physicians who were specialists.

Outpatient specialty visits and associated diagnoses. For each beneficiary in each year, we assessed the total number of outpatient specialist visits, defined as Current Procedural Terminology codes 99201-99205 (new patient visits) or 99211-99215 (established visits) with physicians in non–primary care specialties. As our primary outcome, we focused specifically on new specialist visits because ACOs may be able to curtail use of specialty care or steer patients to different practices more easily when specialty care is initiated. For ACO-attributed patients, we additionally categorized specialist visits as occurring inside the patient’s ACO if provided by the ACO’s contracting network versus outside the ACO if not. We also examined the most common primary diagnoses for new specialist visits among ACOs in 2014 to examine patterns of specialty care needs for ACOs.

Contract penetration. We defined contract penetration as the proportion of an ACO’s outpatient Medicare revenue that is devoted to its attributed population. To measure contract penetration for each ACO annually, we first summed annual spending, including coinsurance amounts, for all services delivered in outpatient settings that were billed by an ACO’s set of participating practices. We then calculated the proportion of this spending that was devoted to beneficiaries assigned to the ACO, as opposed to other beneficiaries receiving outpatient care from the ACO.

Leakage of specialty visits. For each ACO in each year, we calculated the percentage of all outpatient specialty visits provided to beneficiaries attributed to the ACO that were not provided by the ACO’s contracting network. Our assessments overestimate leakage for ACOs whose parent organization included specialty practices that were not included as participants in the ACO contract, as we could observe only participating practices.27

Stability of beneficiary attribution. Because ACO efforts to contain leakage and engage patients may result in attributed populations that are more stable over time, for each year we also assessed the proportion of beneficiaries attributed to each ACO who had been attributed to the same ACO in the previous year.

Patient covariates. From Medicare Master Beneficiary Summary Files, we assessed the age, sex, racial or ethnic group, and Medicaid coverage of beneficiaries, as well as whether disability was the original reason for their Medicare eligibility and whether they had end-stage renal disease.30 From the Chronic Conditions Data Warehouse (CCW), which draws from diagnoses since 1999 to describe beneficiaries’ accumulated disease burden, we assessed whether beneficiaries had any of 27 conditions in the CCW by the start of each study year.31 From diagnoses in the preceding year of claims, we also calculated a Hierarchical Condition Category risk score for each beneficiary in each study year.32 We determined whether beneficiaries were long-term nursing home residents using a validated claims-based algorithm.33 Finally, from US Census data, we assessed area-level sociodemographic characteristics.34

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