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Medicare ACOs Won’t Tell How They Pay Doctors: American Journal of Public Health Study

July 12, 2017

Medicare ACOs Won’t Tell How They Pay Doctors: American Journal of Public Health Study

Organizations contracting to care for millions of Medicare enrollees won’t disclose whether they penalize doctors for ordering tests, referrals or other expensive care

NOTE: For a copy of the embargoed study, please contact the people listed above.

WASHINGTON, D.C. – Ninety-one percent of the accountable care organizations (ACOs) that provide care to 9 million Medicare enrollees refuse to disclose their physician payment incentives, according to new research published today in the American Journal of Public Health. ACOs, similar to the HMOs of the 1990s, receive capitation-like payments and keep a portion of savings if they reduce patients’ use of care. Critics worry that ACOs, like HMOs, might pressure their doctors to deny needed care.

The research team from Montefiore Medical Center in New York, City University of New York at Hunter College and the national consumer group Public Citizen surveyed all 426 ACOs participating in Medicare in 2015. The survey asked how each ACO paid its primary care (PCP) and specialist physicians, and whether doctors were financially penalized for ordering tests or making referrals. Despite repeated email and mail surveys directed to the ACO’s designated public contact person, only 39 ACOs (9.2 percent of all those surveyed) provided any information on their physician payment policies.

Among the few ACOs that responded, 85 percent indicated that they tied PCPs’ compensation to quality metrics. Almost half said they offered doctors incentives to reduce care, via bonuses or financial penalties depending on how much care individual doctors ordered for their patients; other times, physician reimbursement was tied to the bonuses or penalties that ACOs received from Medicare.

The researchers noted that in the 1990s there was widespread concern that HMOs were denying patients needed care. This concern led the Centers for Medicare and Medicaid Services (CMS) to survey HMOs in the 1990s regarding their financial incentives and to require that Medicare HMOs publicly disclose those incentives. However, CMS has inexcusably waived the disclosure requirement for ACOs, which started contracting with Medicare in 2011 and, like HMOs, may gain financially by denying care.

“The lack of ACO transparency means that millions of Medicare patients can’t know how their doctors are being paid. Despite this, ACOs have garnered support from policymakers,” said study author Dr. Mayce Mansour, a primary care physician at Mount Sinai who was a lead author of the study and a resident at Montefiore when the study was initiated. “Since polls have shown that patients are wary of incentives for under-care, we wanted to learn more about compensation incentives that may drive physician behavior and could pose a conflict of interest.”

Dr. Nathan Favini, also a lead author of the study, said, “The public’s trust is absolutely critical for any health reform effort to succeed. ACOs should learn from the backlash against HMOs, disclose how they pay their physicians and make sure their providers are not cutting back on necessary care.”

“Millions of Medicare patients now getting their care through ACOs would be anxious to know if their doctors have incentives to skimp on their care in order to do better financially,” said Dr. Sidney Wolfe, founder of and senior adviser to Public Citizen’s Health Research Group. “Most patients can’t currently find out about these incentives, and CMS’ failure to mandate their disclosure is unacceptable.”

“In 1995, I was fired by U.S. Healthcare — now called Aetna — for violating a ‘gag clause’ in my contract, and revealing that the HMO offered doctors big bonuses for denying care to our patients,” reported Dr. David Himmelstein, a distinguished professor at the City University of New York at Hunter College and lecturer in medicine at Harvard who was the study’s senior author. “In response to the ensuing public outcry, Medicare banned gag clauses and required HMOs to disclose how they pay physicians. The same rules should apply to ACOs, which are essentially the modern version of HMOs.” 

View the abstract.