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Avoiding unintended incentives in ACO payment models.
- Source :
-
Health affairs (Project Hope) [Health Aff (Millwood)] 2015 Jan; Vol. 34 (1), pp. 143-9. - Publication Year :
- 2015
-
Abstract
- One goal of the Medicare Shared Savings Program for accountable care organizations (ACOs) is to reduce Medicare spending for ACOs' patients relative to the organizations' spending history. However, we found that current rules for setting ACO spending targets (or benchmarks) diminish ACOs' incentives to generate savings and may even encourage higher instead of lower Medicare spending. Spending in the three years before ACOs enter or renew a contract is weighted unequally in the benchmark calculation, with a high weight of 0.6 given to the year just before a new contract starts. Thus, ACOs have incentives to increase spending in that year to inflate their benchmark for future years and thereby make it easier to obtain shared savings from Medicare in the new contract period. We suggest strategies to improve incentives for ACOs, including changes to the weights used to determine benchmarks and new payment models that base an ACO's spending target not only on its own past performance but also on the performance of other ACOs or Medicare providers.<br /> (Project HOPEāThe People-to-People Health Foundation, Inc.)
- Subjects :
- Benchmarking economics
Benchmarking trends
Cost Control economics
Cost Control trends
Cost Savings economics
Cost Savings trends
Delivery of Health Care economics
Delivery of Health Care trends
Fee-for-Service Plans economics
Fee-for-Service Plans trends
Forecasting
Humans
United States
Accountable Care Organizations economics
Accountable Care Organizations trends
Medicare economics
Medicare trends
Reimbursement, Incentive economics
Reimbursement, Incentive trends
Subjects
Details
- Language :
- English
- ISSN :
- 1544-5208
- Volume :
- 34
- Issue :
- 1
- Database :
- MEDLINE
- Journal :
- Health affairs (Project Hope)
- Publication Type :
- Academic Journal
- Accession number :
- 25561655
- Full Text :
- https://doi.org/10.1377/hlthaff.2014.0444