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Evaluating the Effects of Pioneer Accountable Care Organizations on Medicare Part D Drug Spending and Utilization

Zhang, Yuting PhD; Caines, Kadin J. MPH; Powers, Christopher A. PharmD

doi: 10.1097/MLR.0000000000000686
Original Articles

Background: The improvement of medication use is a critical mechanism that accountable care organization (ACO) could use to save overall costs. Currently pharmaceutical spending is not part of the calculation for ACO-shared savings and risks. Thus, ACO providers may have strong incentives to prescribe more medications hoping to avoid expensive downstream medical costs.

Methods: We designed a quasinatural experiment study to evaluate the effects of Pioneer ACOs on Medicare Part D spending and utilization. Medicare fee-for-service beneficiaries with Part D drug coverage who were aligned to a Pioneer ACO were compared with a random 5% sample of non-ACO beneficiaries. Outcomes included changes in Part D spending, number of prescription fills, percent of brand medications, and total Part A and B medical spending. We utilized a generalized linear model with a difference-in-differences approach to estimate 2011–2012 changes in these outcomes among beneficiaries aligned with Pioneer ACOs, adjusting for all beneficiary-level demographics, income and insurance status, clinical characteristics, and regional fixed effects.

Results: Being in an ACO did not significantly affect Part D spending (−$23.52; P=0.19), total prescriptions filled (−0.12; P=0.27), and the percent of claims for brand-name drugs (0.06%; P=0.23). The ACO group was associated with savings in Parts A and B spending of $345 (P<0.0001) per person per year.

Conclusions: We found that beneficiaries aligned to Pioneer ACOs were not associated with changes in pharmaceutical spending and use, but were associated with savings in Parts A and B spending in 2012.

*Department of Health Policy and Management, University of Pittsburgh, Pittsburgh, PA

Centers for Medicare and Medicaid Services, Office of Enterprise Data and Analytics, Baltimore, MD

Funded by the Commonwealth Fund (Grant 20150380) (Y.Z.).

The views expressed in this paper are those of the authors and no official endorsement by the Department of Health and Human Services or the Centers for Medicare & Medicaid Services is intended or should be inferred.

The authors declare no conflict of interest.

Reprints: Yuting Zhang, PhD, Department of Health Policy and Management, University of Pittsburgh, 130 De Soto Street, A664 Crabtree Hall, Pittsburgh, PA 15261. E-mail: ytzhang@pitt.edu.

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