Out-Of-Network Primary Care Is Associated With Higher Per Beneficiary Spending In Medicare ACOs
Sunny Lin is supported by a grant from the Agency for Healthcare Research and Quality (AHRQ) (Grant No. R36HS025875-01A1). Andrew Ryan is supported by a grant from the National Institute on Aging (Grant No. R01AG047932). Julia Adler-Milstein is supported by a grant from AHRQ (Grant No. 1R01HS025165-01A1). John Hollingsworth is supported by grants from AHRQ (Grant Nos. R01HS024728 and R01HS024525). The content is solely the responsibility of the authors and does not necessarily represent the official views of AHRQ or the National Institute on Aging.
Despite expectations that Medicare accountable care organizations (ACOs) would curb health care spending, their effect has been modest. One possible explanation is that ACOs’ inability to prohibit out-of-network care limits their control over spending. To examine this possibility, we examined the association between out-of-network care and per beneficiary spending using national Medicare data for 2012–15. While there was no association between out-of-network specialty care and ACO spending, each percentage-point increase in receipt of out-of-network primary care was associated with an increase of $10.79 in quarterly total ACO spending per beneficiary. When we broke down total spending by place of service, we found that out-of-network primary care was associated with higher spending in outpatient, skilled nursing facility, and emergency department settings, but not inpatient settings. Our findings suggest an opportunity for the Medicare program to realize substantial savings, if policy makers developed explicit incentives for beneficiaries to seek more of their primary care within network.
Locate the Document
Lin, S. C., Yan, P. L., Moloci, N. M., Lawton, E. J., Ryan, A. M., Adler-Milstein, J., & Hollingsworth, J. M. (2020). Out-Of-Network Primary Care Is Associated With Higher Per Beneficiary Spending In Medicare ACOs: An examination of the association between out-of-network care and per beneficiary spending using national Medicare data. Health Affairs, 39(2), 310-318.