ACO ‘Predecessor’ Saved Medicare Money, According To JAMA Study

Topics: Health Costs, Delivery of Care, Medicare, Quality, Aging

Sep 12, 2012

The study found that the Medicare Physician Group Practice Demonstration resulted in health care savings.

Reuters: Doctor Incentive Groups May Save Money, With Effort
According to a new study, a precursor to the Accountable Care Organizations that policymakers are hoping will lower health costs and improve quality did reduce spending in some organizations, but not in others. ACOs and the earlier pilot program, known as the Medicare Physician Group Practice Demonstration, emphasize shared savings for groups of health workers and award bonus payments based on their quality of care (Pittman, 9/11).

Kaiser Health News: Capsules: Medicare Pilot Program Shows Cost Savings Treating Dual-Eligibles
Researchers Tuesday released a deeper look at the Physician Group Practice Demonstration, one of the federal government’s first pay-for-performance experiments to improve health care and reduce costs for the Medicare population. They found that it created significant savings — especially for dual eligibles, which is the population who receives health coverage through both Medicare and Medicaid and who are often the health system’s sickest and costliest patients (Kulkarni, 9/11).

The New York Times: New Medical Care Networks Show Savings
The nation’s nine million “dual eligibles,” as they are known, make up 15 percent of the Medicaid population but account for 39 percent of the program’s spending. … The findings come as accountable care organizations are forming around the country. According to the Department of Health and Human Services, more than 150 such groups now serve about 2.4 million Medicare patients  (Goodnough, 9/11).

Modern Healthcare: Spending Varied Widely In Early ACO Test, Report Says
Medicare spending varied widely among 10 physician groups that tested accountable care ahead of healthcare reform, with the most notable reductions among low-income, medically complex seniors, a newly published estimate shows. On average, Medicare spending for low-income seniors also covered by Medicaid, a population known as dual eligibles, declined by $532 annually for elderly patients included in the five-year accountable care pilot (Evans, 9/11).

Medpage Today: ACO Precursor Saved Money
Colla and colleagues also found that most of the overall savings were achieved through reductions in acute care hospitalizations … They also saw a significant variation in savings across practice groups, ranging from an overall mean per-capita annual savings of $866 to an increase in expenditures of $749. The reason for such differences remains unclear, but the researchers suggested that organizations that start out with higher spending levels have greater opportunities to achieve savings (Fiore, 9/11).

In other Medicare news –

The New York Times: As Medicare Fraud Evolves, Vigilance Is Required
Officials are also noticing a huge increase in problems in the home health care and hospice areas. For instance, some Medicare recipients are persuaded to sign up for “free” massages in their homes, and Medicare is fraudulently billed for physical therapy. Or, unscrupulous doctors approve patients for hospice care who are not terminally ill and may be experiencing something as minor as recent weight loss (Konrad, 9/11).

CQ HealthBeat: Medicare Official Reminds Insurers Of Consequences Of Low Ratings
In an effort to discourage participation in low-performing Medicare Advantage health plans, a top Medicare official Tuesday reminded an audience of insurers that seniors who want to enroll in such plans will have to call the company rather than joining online. Jon Blum, deputy administrator of the Centers for Medicare and Medicaid Services, told a conference sponsored by the trade group America’s Health Insurance Plans (AHIP) that Medicare beneficiaries will get warnings about health plans that have received ratings of fewer than three stars for three consecutive years. … The decision to discourage seniors from enrolling in low-rated plans was in a document released in April (Adams, 9/11).

This is part of Kaiser Health News’ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.


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