Small Practice Participation and Performance in Medicare Accountable Care Organizations

OBJECTIVES: Alternative payment models (APMs) encouraging provider collaboration may help small practices overcome the participation challenges that they face in APMs. We aimed to determine whether small practices in accountable care organizations (ACOs) reduced their beneficiaries' spending more than large practices in ACOs. STUDY DESIGN: Retrospective cohort study of Medicare patients attributed to ACOs and non-ACOs. METHODS: We conducted a modified difference-indifferences analysis that allowed us to compare large vs small practices before and after the Medicare Shared Savings Program (MSSP) ACO started, between 2010 and 2016. Our sample included Medicare fee-for-service beneficiaries with 12 months of Medicare Part A and Part B (unless death) who were attributed to small (≤ 15 providers) and large (> 15 providers) practices participating in ACOs and non-ACOs. The outcome was patient annual spending based on CMS' total per capita costs. RESULTS: Patients attributed to small practices in ACOs had annual Medicare spending decreases of $269 (95% CI, $213-$325; P < .001) more than patients attributed to large practices in ACOs. Small ACO practices reduced spending more than large practices by $165 for physician services (95% CI, $140-$190; P < .001), $113 for hospital/acute care (95% CI, $65-162; P < .001), and $52 for other services (95% CI, $27-$77; P < .001). Small practices in ACOs spent $253 more on average at baseline than small practices in non-ACOs. ACOs with a higher proportion of small practices were more likely to receive shared savings payments. CONCLUSIONS: Small practices in ACOs controlled costs more so than large practices. Small practice participation may generate higher savings for ACOs.