Out-of-Network Primary Care Associated With Greater Beneficiary Spending in Medicare ACOs, Study Finds

February 25, 2020

Out-of-network primary care may be associated with higher per-beneficiary spending in Medicare accountable care organizations (ACOs), reported a recent study published in Health Affairs.

Out-of-network primary care may be associated with higher per beneficiary spending in Medicare accountable care organizations (ACOs), reported a recent study published in Health Affairs.

The effect of ACOs on actual spending has been debated, but it is a point of increasing concern, since Medicare spending is projected to hit $1.7 trillion a year in about 10 years.

The researchers investigated out-of-network care and per beneficiary spending using national Medicare data on 1.6 million patients from 2012 to 2015. The study determined which beneficiaries were attributed to a Medicare Shared Savings Program (MSSP) accountable care organization (ACO) during a given year and included those who had continuous Parts A and B coverage in that year. Then, the researchers used a 2-step process to calculate the proportion of outpatient primary care and specialty care visits delivered out of network.

“Despite great fanfare, MSSP evaluations have demonstrated only modest spending reductions, with significant variation across ACOs in performance. One reason for such variation may be differences in the level of out-of-network care that ACO beneficiaries receive,” the study noted. “Unlike beneficiaries in health maintenance organizations, which are allowed to implement explicit mechanisms to incentivize patients to stay in network (for example, requiring referrals and charging higher fees for out-of-network care), beneficiaries assigned to an ACO are free to seek care from whomever they want.”

The results revealed that there was no association between out-of-network specialty care and ACO spending. However, each percentage point increase in receipt of out-of-network primary care was associated with an increase of $10.79 in quarterly total ACO spending per patient, or about $43 annually. Furthermore, after breaking down total spending by place of service, the researchers found that out-of-network primary care was associated with higher spending in outpatient, skilled nursing facility, and emergency department settings, but not inpatient settings.

“These findings highlight the critical role of primary care physicians and suggest that ACOs that are not able to keep primary care services in network are less likely to succeed under current ACO policies. Relatedly, we also found that ACOs with higher levels of out-of-network primary care were also more likely to serve disadvantaged patients, which suggests that current Medicare ACO design may inadvertently exacerbate existing health care disparities,” concluded the authors.

According to the study, the results emphasize the need for policy makers to develop explicit incentives for beneficiaries to seek more of their primary care within network.

Reference

Lin S, Yan P, et al. Out-of-network primary care is associated with higher per beneficiary spending in Medicare ACOs. Health Aff (Millwood). 2020;39(2):310-318. doi: 10.1377/hlthaff.2019.00181.