Risk Adjustment In Medicare ACO Program Deters Coding Increases But May Lead ACOs To Drop High-Risk Beneficiaries.

Markovitz AA1, Hollingsworth JM2, Ayanian JZ3, Norton EC4, Moloci NM5, Yan PL6, Ryan AM7.

Author information

1: Adam A. Markovitz is an MD-PhD candidate in the Department of Health Management and Policy, University of Michigan School of Public Health, and the University of Michigan Medical School, in Ann Arbor.
2: John M. Hollingsworth is an associate professor in the Dow Division of Health Services Research, Department of Urology, University of Michigan Medical School, in Ann Arbor.
3: John Z. Ayanian is the Alice Hamilton Collegiate Professor of Medicine in the Department of Internal Medicine, University of Michigan Medical School.
4: Edward C. Norton is a professor in the Department of Health Management and Policy in the University of Michigan School of Public Health, in Ann Arbor.
5: Nicholas M. Moloci is a senior statistician in the Dow Division of Health Services Research, Department of Urology, University of Michigan Medical School.
6: Phyllis L. Yan is a statistician in the Dow Division of Health Services Research, Department of Urology, University of Michigan Medical School.
7: Andrew M. Ryan ( amryan@umich.edu ) is the UnitedHealthcare Professor of Health Care Management in the Department of Health Management and Policy, University of Michigan School of Public Health.

Abstract

The Medicare Shared Savings Program (MSSP) adjusts savings benchmarks by beneficiaries' baseline risk scores. To discourage increased coding intensity, the benchmark is not adjusted upward if beneficiaries' risk scores rise while in the MSSP. As a result, accountable care organizations (ACOs) have an incentive to avoid increasingly sick or expensive beneficiaries. We examined whether beneficiaries' exposure to the MSSP was associated with within-beneficiary changes in risk scores and whether risk scores were associated with entry to or exit from the MSSP. We found that the MSSP was not associated with consistent changes in within-beneficiary risk scores. Conversely, beneficiaries at the ninety-fifth percentile of risk score had a 21.6 percent chance of exiting the MSSP, compared to a 16.0 percent chance among beneficiaries at the fiftieth percentile. The decision not to upwardly adjust risk scores in the MSSP has successfully deterred coding increases but might discourage ACOs to care for high-risk beneficiaries in the MSSP .