CMS Reduced Financial Awards for 65 ACOs Due to Quality Scores
CMS lowered 65 Medicare accountable care organizations' financial awards for 2014 by $41 million because of quality performance, according to a Leavitt Partners analysis, Modern Healthcare reports (Evans, Modern Healthcare, 10/16).
In August, CMS announced that 97 of 353 Medicare accountable care organizations earned bonuses last year.
The results are from two ACO programs that began in 2012:
- The Medicare Shared Savings Program; and
- The Pioneer ACO program.
Altogether, the 333 MSSP and 20 Pioneer ACOs generated net savings of $411 million for Medicare in 2014. In addition, the ACOs generally improved their performance on most quality measures (California Healthline, 8/26).
The awards were determined based on how much money the ACOs saved Medicare. CMS last year also began tying awards to 19 quality performance measures under the program. For an ACO to receive full credit for a quality measure, the organization must rank within the top 90th percentile of the measure. CMS will consider 33 quality measures when calculating 2015 awards.
According to the analysis, a quality measure related to avoidable initial hospitalizations for patients with congestive heart failure was the largest contributor to a decline in ACO awards. The measure accounted for $5.6 million, or 13%, of the drop. Meanwhile, a quality measure relating to preventable hospitalizations for patients with chronic obstructive pulmonary disease or asthma accounted for $3.6 million of the payment reductions.
According to Leavitt Partners Senior Director of Research and Development David Muhlestein, none of the ACO programs' top financial performers ranked in the 90th percentile for quality nationally. Further, none of the other approximately 260 ACOs that reported performance measures for 2014 ranked in the top 90th percentile.
According to policy experts, the ACOs' weak performance on quality measures raises questions about the accuracy of quality measures used in the program.
Muhlestein said that researchers expected a greater variation in quality performance among the large group of ACOs. He noted that it is unclear what caused the organizations to have such poor quality performance.
Jeffery Spight -- who oversees ACOs for Universal American, which operates ACOs and physician groups throughout the country -- noted that the ACOs' low quality performance mainly resulted from the organizations' challenges to collect data and document heart failure patients in accordance with CMS standards.
Meanwhile, J. Michael McWilliams, an associate professor of health policy at Harvard University, said that quality measures related to hospital use could be significantly influenced by patient characteristics that vary among organizations. He noted that CMS has put forth limited effort to adjust ACOs' quality performance to account for differences in patient health. For example, McWilliams and colleagues wrote in JAMA Internal Medicine that there are almost two dozen demographic factors that "significantly predicted" readmission but that such characteristics are not part of CMS' formula for adjusting awards based on readmission rates. McWilliams said, "The penalties that are levied are due to the patient[s] they serve and not the quality of care they provide" (Modern Healthcare, 10/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.