ACOs serve more Americans while increasing quality and savings

Accountable care organizations (ACOs) are serving more Medicare beneficiaries while generating larger savings to the Medicare Trust Funds and delivering higher quality care. In the third year of the Pioneer ACO program and Medicare Shared Savings Program (MSSP), both programs showed significant improvements, according to CMS’ 2014 quality and financial performance results. CMS Acting Administrator Andy Slavitt said, “These results show that accountable care organizations as a group are on the path towards transforming how care is provided. Many of these ACOs are demonstrating that they can deliver a higher level of coordinated care that leads to healthier people and smarter spending.”


ACOs are groups of physicians, facilities, and other health care professionals that agree to provide coordinated care to their patients to receive savings. ACOs use financial incentives to change behavior, such as paying more to physicians who coordinate care and use health information technologies. ACOs are judged on the care they provide, measured by various metrics—including how highly patients rate the doctor, how well clinicians communicate, whether the ACO screened for high blood pressure and tobacco use and cessation, and use of Electronic Health Records (EHRs). The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) authorized two distinct ACO models.

The Pioneer ACO model, created by section 3021 of the ACA, is designed to support organizations with more experience in offering coordinated, patient-centered care. The program aims to test the payment arrangement of shared savings and shared losses, offering “higher levels of reward and risk than in the Shared Savings Program.” For the Pioneer program, ACOs agree to share their savings and losses with CMS, to a certain amount. Each Pioneer ACO had a minimum savings rate / minimum loss rate—if the gross savings / loss percentage was within that rate, the ACO neither received shared savings nor paid shared losses. If the ACO gained or lost more than their minimum rate, they either received a shared savings payment from CMS or owed CMS a shared loss payment, splitting the remaining amount.

Section 3022 of the ACA authorized the MSSP, which requires ACOs to meet 33 quality metrics specified in CMS implementing regulations. ACOs in the MSSP are not required to be subject to losses.

Third-year results

In 2014, the third performance year for both programs, Pioneer ACOs showed improvements in 28 of 33 quality measures and experienced average improvements of 3.6 percent across all quality measures. MSSP ACOs that reported quality measures in 2013 and 2014 improved on 27 of 33 quality measures.

When an ACO achieves high-quality care and effectively reduces spending above specified thresholds, it shares in the savings generated for Medicare. In 2014, 20 Pioneer and 333 Shared Savings Program ACOs generated more than $411 million in savings, which includes all ACOs’ savings and losses.

Other findings

In its analysis of the third-year results, CMS also discussed trends in the. For example, ACOs with more experience in the program tend to perform better over time, and the number of beneficiaries served by ACOs has consistently grown from year to year, and is likely to continue growing. Since the ACA was passed, more than 420 Medicare ACOs have been established, serving more than 7.8 million Americans.

Fake hospice nurse with stolen identity treated 243 patients

A district judge sentenced a Dallas woman to 48 months in prison and ordered her to pay $233,000.00 in restitution following her guilty plea to one count of fraud in connection with means of identification. According to a Federal Bureau of Investigation (FBI) press release, the woman treated 243 hospice patients while posing as nurse with a stolen driver’s license, social security number, and other identification.


Jada Necole Antoine, who was not licensed as a physician, registered nurse, or other health care provider, stole a registered nurse’s driver’s license and social security card and then used those and other means of identification to obtain employment at eight different hospice companies. According to a report from the Dallas Morning News, Antoine was not even a high school graduate.

During her fraudulent employment, Antoine worked as a registered nurse and had direct responsibility for patient care and treated 243 patients. She treated a wide variety of patients, including those who were mentally ill, comatose, asleep, and otherwise unresponsive to sound and touch. She was involved in admitting patients into hospice care. Antoine violated patient privacy because patients routinely revealed parts of their bodies to her for examination that they would not have otherwise revealed, had they known about the truth of her qualifications. She also violated patient privacy by gaining access to patient charts and by speaking with staff and family members.


During the course of the fraud, Antoine received approximately $107,000 in compensation from the hospice agencies where she was fraudulently employed. Antoine’s fraud caused the hospice companies to submit claims to Medicare and Medicaid for the hospice services performed by her. According to the FBI, from approximately January 2009 through April 20, 2012, about $800,000 in hospice claims were submitted to Medicare for services purportedly performed by Antoine while she was impersonating the nurse whose identification she stole. She pleaded guilty on December 9, 2014.

Less follow-up care, more hospital readmissions for rural Medicare beneficiaries

Medicare beneficiaries in rural areas are less likely to seek follow-up care after hospital visits, which may put them at an increased risk for visits to the emergency departments (EDs) and hospital readmissions. The results of a study published in Medical Care suggest that policies need to be implemented that focus on improving follow-up care for rural Medicare beneficiaries, not only to provide better care, but also in consideration of the recent shift toward “pay for performance” programs that link hospital reimbursement to performance on patient outcomes.

30-day outcomes

The study, which was performed by researchers at RTI International and the University of North Carolina at Chapel Hill, examined 12,000 Medicare-eligible patients who had been admitted to a hospital between 2000 and 2010. Approximately 4,000 of those patients lived in rural areas. The patients were divided into rural (large, small, and isolated) and urban groups. The study examined the number of follow-up health care visits, ED visits, and unplanned hospital readmissions for each group. The data suggested that Medicare beneficiaries in isolated areas were 19 percent less likely to have a follow-up health care visit within 30 days of leaving the hospital. The results also showed that patients living in large or small rural areas had a higher risk of ED visits than patients in urban areas.

Hospital location

While the study found no major difference in the overall risk of unplanned hospital readmissions between rural versus urban residents, it did find that the location of the hospital had a significant effect on readmissions. The study found that patients discharged from hospitals in large rural settings had 32 percent higher risk of unplanned readmissions as compared to those discharged from urban hospitals. Additionally, Patients who were discharged from small rural settings had a 42 percent higher risk of unplanned readmissions.


The findings implicate not only patient care but payments to rural providers who may be subject to the CMS readmission penalty for higher-than-expected 30-day readmission rates. The Hospital Readmissions Reduction Program (HRRP) was implemented by Section 3025 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) required CMS to reduce payments to acute inpatient hospitals (IPPS) with high readmission rates.

Lead author of the study, Matthew Toth, PhD, MSW, and his coauthors stated, “Consistent with previous research on safety-net and low-volume hospitals, our study finds that rural hospitals serving elderly Medicare beneficiaries may be disproportionately penalized under this program.” They added, “If so, poor readmission outcomes among these hospitals may be exacerbated.”


The study’s authors concluded that their findings show that health care policies need to focus on improving access to care and reducing unplanned acute events for rural patients, which could include support for programs that focus on primary care services, telehealth, care management, and transitional care.

Hospice offers significant nonfinancial benefits but not Medicare savings

The significant rise in the use of the Medicare hospice benefit has not, as previous studies suggested, reduced Medicare spending, according to a report prepared by Direct Research, LLC, for the Medicare Payment Advisory Commission (MedPAC). While the report focused on the impact of the hospice benefit on Medicare costs, it noted that its findings do not focus on the main benefits of hospice, which are not financial, and offer patients individualized, “holistic end-of-life care” that is focused on the management of symptoms and providing psychosocial supports.

Hospice growth

The use of Medicare hospice by elderly fee-for-service decedents almost doubled over the past decade, rising from 26 percent in 2002 to 47 percent in 2012. Hospice currently provides services to the majority of elderly beneficiaries who die from cancer and provides services to a growing percentage of elderly non-cancer beneficiaries.


A previous study estimated that hospice saved thousands of dollars per patient for even short stays. The Direct Research report reasoned that if this were true, the rapid hospice growth should have reduced last-year-of-life spending. The study took three approaches to determining the effect of the Medicare hospice benefit on spending. It first tracked the trend in end-of-life spending and hospice enrollment over the past decade. It then replicated and reconciled conflicting findings relating to hospice savings or costs. Lastly, it departed from a person-level analysis of the hospice benefit’s impact on Medicare spending in favor of a market-level analysis.

Medicare spending

According to the findings of the report, the “preponderance of evidence” suggests that hospice has not led to reductions in Medicare spending. The report documented the substantial growth in Medicare hospice use over the past decade while finding that Medicare end-of-life costs also grew. Additionally, the report demonstrated that results of previous studies finding hospice cost savings may have resulted from the methodology employed, and another methodology suggests that hospice did not result in costs savings, and may have even led to modestly higher costs, which were concentrated in non-cancer, longer-stay decedents. Finally, the report examined the cost of all decedents at a market level, which validated its prior findings that hospice appears to lead to the modest rise in end-of-life costs, and only reduces the costs for decedents with cancer, but not other individuals who have long stays in hospice.