The Impact of Simultaneous Hospital Participation in Accountable Care Organizations and Bundled Payments on Episode Outcomes

Abstract

Among hospitals accepting bundled payments, simultaneous “co-participation” in accountable care organizations (ACOs) could impact episode outcomes compared to bundled payment participation alone. Difference-in-differences (DID) analysis of 1 857 653 ACO-attributed Medicare beneficiaries. The study exposure was hospitalization for 24 procedure-based and 24 condition-based episodes at hospitals participating in bundled payments and ACOs (co-participant) versus only bundled payments. Study outcomes included episode quality, postacute utilization, and spending. For procedure-based episodes, patients hospitalized at co-participant and bundled payment hospitals did not exhibit differential changes in risk-adjusted mortality (DID 0.04 percentage points [p.p.], 95% confidence interval [CI] −0.28 p.p. to 0.37 p.p., P = 0.79), readmissions (DID −0.32 p.p., 95% CI −1.5 p.p. to 0.82 p.p., P = 0.59), postdischarge institutional spending (DID $119, 95% CI −$216 to $455, P = 0.49), or postacute utilization. Similarly, outcomes for condition-based episodes did not vary between co-participant and bundled payment hospitals. Payment model co-participation may produce neither synergistic benefits nor negative effects for patients.

Association of Patient Outcomes With Bundled Payments Among Hospitalized Patients Attributed to Accountable Care Organizations

“…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. This approach effectively penalizes ACOs whose patients receive care from rapidly improving bundled payment participants …”

“…However, despite the continued commitment of the CMS to scaling up both ACOs and bundled payments, current policy financially penalizes ACOs when attributed beneficiaries receive care from bundled payment participants—a dynamic that may dissuade patient inclusion in both payment models and fail to capture any potential additive benefits . These issues are particularly important for Medicare policy makers, whose statutory authority to expand alternative payment models is based only on single-model evaluations, not evaluations that account for patient inclusion in multiple models.…”