Objective: To examine changes in more and less discretionary condition-specific postacute care use (skilled nursing, inpatient rehabilitation, home health) associated with Medicare accountable care organization (ACO) implementation.
Data sources: 2009-2014 Medicare fee-for-service claims.
Study design: Difference-in-difference methodology comparing postacute outcomes after hospitalization for hip fracture and stroke (where rehabilitation is fundamental to the episode of care) to pneumonia, (where it is more discretionary) for beneficiaries attributed to ACO and non-ACO providers.
Principal findings: Across all 3 cohorts, in the baseline period ACO patients were more likely to receive Medicare-paid postacute care and had higher episode spending. In hip fracture patients where rehabilitation is standard of care, ACO implementation was associated with 6%-8% increases in probability of admission to a skilled nursing facility or inpatient rehabilitation (compared with home without care), and a slight reduction in readmissions. In a clinical condition where rehabilitation is more discretionary, pneumonia, ACO implementation was not associated with changes in postacute location, but episodic spending decreased 2%-3%. Spending decreases were concentrated in the least complex patients. Across all cohorts, the length of stay in skilled nursing facilities decreased with ACO implementation.
Conclusions: ACOs decreased spending on postacute care by decreasing use of discretionary services. ACO implementation was associated with reduced length of stay in skilled nursing facilities, while hip fracture patients used institutional postacute settings at higher rates. Among pneumonia patients, we observed decreases in spending, readmission days, and mortality associated with ACO implementation.