How are ACOs distributing their savings? 7 study findings

Medicare Shared Savings Program accountable care organizations have widely different plans for how they will distribute shared savings, according to a recent study published in The American Journal of Managed Care.

The ACOs can individually choose how to divide their savings, but are required to publicly and transparently report their distribution plans online. It is suggested that plans include the percentage of savings that will go to infrastructure, primary care providers, specialists and hospitals.

After examining 338 MSSP organizations launched between April 2012 and January 2014, the researchers found quite a bit of variation in how ACOs planned to share savings and the level of detail in their plans.

"The complexity, uncertainty, and dynamic nature of an ACO's shared savings distribution plan pose challenges for static posting online," the authors wrote. "For such an organization to post discrete percentages — when such percentages are almost certain to change — it could actually work against the ethical value of transparency.

Here are seven findings from the report.

  • Most ACOs (84 percent) publically reported information on their shared savings distribution plans online.
  • Of those with public information, 28 percent reported their plans had yet to be determined, 10 percent made general statements about distributing funds "to incentivize physicians and build infrastructure," and 62 percent, or 176 organizations, outlined detailed plans.
  • Of the 176 organizations with detailed distribution plans, 88 percent said they would put an average of 33 percent of shared savings toward infrastructure.
  • Of those with detailed plans, 94 percent said they would distribute an average of 63 percent of shared savings to primary care providers, specialists or hospitals.
  • Just 16 percent of organizations planned to give an average of 4 percent of savings to "other" participants such as strategic partners or advisory committees.
  • Fourteen percent planned to use their savings to cover expenses before determining how they would distribute the savings among participants.
  • Of those with detailed plans, 16 percent included information on how savings could benefit patients and 6 percent said they would put a portion toward new programs.

The authors also noted that certain ACO characteristics were associated with certain distribution plans. For example, ACOs with hospital participants were more likely to give physicians and/or hospitals a greater share in savings. Primary care providers shared in the most savings when ACOs were able to generate savings within their first year, according to the report. The authors also noted ACOs with external investors gave a smaller share to physicians and hospitals, likely because some savings went to investors.

 

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