Value-Based Care News

Non-ACO Hospitals Outperform ACOs in Value-Based Care Programs

A recent study revealed that hospitals in ACOs underperform in other value-based care programs despite the initiatives having similar goals.

By Jacqueline LaPointe

- To usher in the age of value-based care, CMS has implemented several value-based care programs and introduced various alternative payment models, such as accountable care organizations (ACO). These programs all have a common goal: raise care quality while reducing healthcare costs.

ACO particpation does not spell success with other value-based care programs, reports a recent study

However, some healthcare providers and hospitals, especially those in ACOs, have found it difficult to coordinate care improvement activities to maximize value-based payments across various programs.

According to a recent study in the American Journal of Managed Care, ACO participation is not correlated with improved performance in other Medicare valued-based initiatives, including the Hospital Value-Based Purchasing and the Hospital-Acquired Condition Reduction programs.

“Despite similar goals to improve healthcare quality and costs, variation exists in hospital participation in an ACO and VBP program,” explained the study.

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  • “Organizations pursuing accountable care while also attempting to maximize performance on Medicare VBP [value-based purchasing] programs must recognize the different objectives of the programs and create strategies unique to each,” the study added.

    Using Medicare’s acute Inpatient Prospective Payment System data from 2013 to 2016, researchers found that hospitals participating in ACOs performed worse than non-ACO hospitals for the Hospital Value-Based Purchasing and Hospital-Acquired Condition Reduction programs by a statistical significance factor of .001.

    Even when researchers adjusted for specific hospital characteristics, such as number of beds, region, ownership, and teaching status, ACO participants still fared worse than non-ACO hospitals in both programs by a statistical significance factor of .62 for the Hospital Value-Based Purchasing Program and .28 for the Hospital-Acquired Condition Reduction program.

    However, the study explained that ACO hospitals outperformed non-ACO participants in the value-based purchasing programs for their first performance year in the ACO, but they could not maintain their coordinated success.

    For example, ACO hospitals did better than their non-ACO counterparts in the Hospital Value-Based Purchasing program during their first performance year. In the second performance year, hospitals that joined an ACO during that period did significantly better.

    By the third year, these ACOs were not able to sustain their success with both the ACO and value-based purchasing programs.

    While ACO participation did not relate to success in two value-based care programs, the study revealed that ACO hospitals were able to outperform other participants in the Hospital Readmissions Reduction Program by a significance factor of .72.

    Researchers reported that most ACO participants earned the maximum points possible for readmission reductions.

    Reducing readmissions is also a benchmark for most ACO arrangements, meaning that participants can earn shared savings in both programs. The increased incentive to reduce readmissions has caused ACO participants to focus their efforts on shared quality measures across programs, the study added.

    “High ACO hospital HRRP [Hospital Readmissions Reduction Program] scores may signify that ACO-participating hospitals will first focus their priorities on value-based measures that overlap between programs,” the study explained.

    The transition to value-based care was never intended to be complete in a day, but the study indicated that aligning quality measures and financial incentives across ACO models and value-based purchasing programs may facilitate its implementation.

    Some ACO participants have voiced similar challenges with ACO incentives and other alternative payment models.

    The National Association of ACOs reported earlier this year that some Medicare ACO participants had trouble coordinating care for patients that fell under bundled payment models, causing ACOs to never receive a share of bundled payments.

    “CMS does not provide opportunities for Medicare ACOs to formally share savings with bundlers, nor does the agency properly incentivize ACOs and bundlers to partner in coordinating beneficiary care,” explained the National Association of ACOs.

    “In fact, the rules guiding shared savings in the bundled payment programs specifically preclude an ACO from receiving payments for savings achieved in the bundled payment programs.”

    The industry group urged CMS to align the programs by incentivizing providers under bundled payment models and ACOs to better coordinate care across the different value-based care programs.

    Dig Deeper:

    How to Manage ACO Risk with Value-Based Purchasing Programs

    What is Value-Based Care, What It Means for Providers?