Combining accountable care organizations and bundled payments can save more money and deliver better outcomes for patients than bundled payments on their own, according to a first-of-its-kind study published in JAMA Health Forum on Friday.
Post-discharge spending for Medicare beneficiaries with a medical condition was 5%, or $323, lower on average if they were in an ACO and a bundled payment system at the same time instead of a bundled payment system alone. By the same token, patients with a medical condition and those undergoing surgery had significantly lower readmissions if they participated in both an ACO and a bundled payment model. However, the combination of an ACO and bundled payments had no meaningful impact on spending for surgical episodes.
ACOs and bundled payments might deliver better results in combination because each type of payment model encourages providers to make different investments, the study said. For instance, ACOs tend to shift patients to outpatient settings to cut back on hospitalizations, while bundled payments encourage providers to curb the use of costly post-acute care like skilled nursing facilities.
Experts have long suspected that overlap between total cost-of-care models like ACOs and bundled payments had the potential to yield better results than either model on its own, but there was no evidence until now. Still, overlap can also cause a bevy of problems if models create conflicting incentives for providers, as is often the case.
“Given our finding that ACOs appear to enhance episodic care, the CMS should encourage overlap of payment arrangements,” the study says. “The potential for additive payment model benefits may be even greater under policy approaches that more directly encourage overlap and better recognize the contributions of both ACO and bundled payment participants in driving episode outcomes.”
The Center for Medicare and Medicaid Innovation will have an opportunity to address these issues as it attempts to simplify its approach to value-based care and coax more providers into taking on financial risk.
The study specifically recommends the innovation center revisit how it handles overlap between ACOs and bundled payments, arguing that the existing approach unfairly penalizes ACOs.
“Currently, when an ACO’s attributed beneficiaries receive care from another organization outside the ACO for care covered by bundled payments, that outside organization’s historical episode spending is counted against the ACO,” the study says.
The researchers analyzed claims data for nearly 10 million Medicare beneficiaries participating in the Medicare Bundled Payments for Care Improvement program to see when their outcomes differed if CMS attributed them to an ACO in the Medicare Shared Savings Program. The study included all 48 bundled payments, including 24 for medical conditions and 24 for surgical procedures.
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