Benchmarking changes and selective participation in the Medicare shared savings program

Abstract

In 2017 the Medicare Shared Savings Program (MSSP) began incorporating regional spending into accountable care organization (ACO) benchmarks, thus favoring the participation of ACOs and practices with lower baseline spending than their region. To characterize providers' responses to these incentives, we isolated changes in spending due to changes in the mix of ACOs and practices participating in the MSSP. In contrast to earlier participation patterns, the composition of the MSSP after 2017 increasingly shifted to providers with lower preexisting levels of spending relative to their region, consistent with a selection response. Changes occurred through the entry of new ACOs with lower baseline spending, the exit of higher-spending ACOs, and the reconfiguration of participant lists favoring lower-spending practices within continuing ACOs. These participation patterns varied meaningfully by ACO type. Although compositional changes could not be definitively tied to benchmarking changes, the disproportionate participation of providers with lower baseline spending implies substantial costs and the need for ACO benchmarking reforms.