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

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 .

Exhibit 2

Caption: Association between attribution to the Medicare Shared Savings Program and within-beneficiary change in risk score SOURCE: Authors’ analysis of 2008–2014 data from: 20% sample of Medicare claims; the American Community Survey; CMS’ Beneficiary-level Shared Savings Program File; Leavitt Partners ACO Database; CMS’ Shared Savings Program Public-Use File. Notes: Models used risk score values derived from claims in the same year to capture contemporaneous associations between MSSP exposure and risk score. High Medicare Advantage penetration was defined as residing in a county ranking at or above the 80^th percentile for share of beneficiaries enrolled in Medicare Advantage. The error bars indicate 95% confidence intervals. MSSP is Medicare Shared Saving Program. ACO is accountable care organization. HCC is Hierarchical Condition Category.

Exhibit 3

Caption: Association between risk score and change in probability of beneficiary exiting the Medicare Shared Savings Program SOURCE: Authors’ analysis of 2012–2014 data from: 20% sample of Medicare claims; the American Community Survey; CMS’ Beneficiary-level Shared Savings Program File. Notes: Analyses of MSSP exit were restricted to beneficiaries attributed to the MSSP in the year prior to analysis. Analyses were restricted to ACOs entering MSSP contracts in 2012 or 2013, as, as we could not observe exit from 2014 ACOs using 2008–2014 data. Probability of exit was estimated as a function of prior-year risk score, market fixed effects, year fixed effects, beneficiary characteristics, and a quadratic risk score term (to allow for potential non-linearity).

Exhibit 4

Caption: Growth in risk score and beneficiary entry and exit to and from the Medicare Shared Savings Program from 2012–2014 SOURCE: Authors’ analysis of 2012–2014 data from: 20% sample of Medicare claims; the American Community Survey; CMS’ Beneficiary-level Shared Savings Program File. Notes: Analyses were restricted to ACOs entering MSSP contracts in 2012 or 2013, as, as we could not observe exit or entry to or from 2014 ACOs using 2008–2014 data. Differences in risk score growth were examined using a linear spline model that included market fixed effects, year fixed effects, beneficiary characteristics, beneficiary MSSP status, and splines for the years 2012–2013 (when no entry or exit occurred) and 2013–2014 (when entry or exit could occur), and an interaction between MSSP status and the two splines. We then tested for differences in risk score growth estimated from this fully-interacted spline model.