Should ACOs Be Revamped?

In an article authored by the American Enterprise Institute’s Resident Fellow and Milton Friedman Chair, James C. Capretta, he argues Medicare Accountable Care Organizations (ACOs) haven’t produced savings for the federal government. He believes ACOs would become more efficient and innovative if they were forced to compete with the other options beneficiaries have for getting their Medicare-covered benefits. Creation of ACOs Capretta describes the initial purpose of ACOs. They were created to address Medicare’s problematic fee-for-service program which has been found to foster waste and overuse of services. While Medicare Advantage provides a private alternative, they are typically led by insurance entities. Medicare ACOs, then, offer physicians and hospital systems the opportunity to form their own managed care arrangements separate from the MA program. ACO Performance Most ACOs participate in the ACA’s Medicare Shared Savings Program (MSSP). MSSP ACOs that meet quality standards and provide care at a sufficiently lower cost get to keep half of the savings they generate. According to recent performance data there were 432 ACOs participating in the shared savings option in 2016. All but 22 of the ACOs were “one-sided risk” ACOs, which means they could earn a bonus payment but were not at risk for a penalty if they exceeded their spending targets. Only 31 percent of the ACOs produced enough savings to earn a bonus payment for 2016. 44 percent of the ACOs...
Source: Policy and Medicine - Category: American Health Authors: Source Type: blogs