Some ACO questions and a gaming hypothesis

I know I said I wouldn’t be blogging this week. I’m making an exception to ask a few questions about ACOs of this blog’s knowledgeable readers.

First question: I understand beneficiaries will be assigned to ACOs according to where they typically receive their primary care. Presumably that has been made more precise. Where can I find the details in as simple a form possible? I’m not eager to comb through the Federal Register if I can avoid it.

Second question: If I understand correctly, once assigned to an ACO, all the costs associated with a beneficiary will be attributed to that ACO, even care received outside the ACO. If true, then in theory ACOs could “game the system” by attracting rivals’ beneficiaries for high margin specialty services, run them up with all manner of ancillary services, collect the FFS payments, but stick their rivals with the attributed costs. Is this possible in principle? Note that beneficiaries might like this very much (even if it isn’t good for them). They are not obligated to receive all their care from the ACO to which they are assigned. Why would they not be attracted to a provider outside their ACO if that provider is willing to do more? Under the “more is better” (false) hypothesis, I don’t see why not. Has my thinking gone awry somewhere?

Many thanks in advance for answers and pointers.

UPDATE: Brad Flansbaum drew my attention to a Health Affairs blog post by Ron Klar, which includes this passage:

Additionally, this creates a real possibility for unacceptable intra-Medicare “cost-shifting” by an ACO to non-prospective-possible beneficiaries, especially those who become hospitalized by non-ACO physicians. That is, ACOs could increase the amount and intensity of services to beneficiaries to whom the ACO was or is not also providing primary care. Finally, by knowing that the “retrospective-reconciliation” will be forthcoming, ACOs might be tempted to try to “manage” their risk for these possibly-assigned beneficiaries by minimizing primary care services to their highest utilizers and maximizing these to their lower utilizers. I find even the possibility of this incentive very disturbing.

Klar’s analysis pertains to the Medicare Shared Savings Program proposed rule. The final rule was issued months after his analysis. I don’t know if anything has changed to alter Klar’s thinking. If I could find an email address for him, I’d ask him.


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