U.S. Department of Health and Human Services 
Office of Inspector General 
 
ACOs Strategies 
for Transitioning 
to Value-Based 
Care: Lessons From 
the Medicare 
Shared Savings 
Program 
 
OEI-02-15-00451 
Joanne M. Chiedi 
July 2019 
Acting Inspector General 
 
oig.hhs.gov  Report in Brief  U.S. Department of Health and Human Services 
July 2019 
Office  of Inspector General 
OEI-02-15-00451 
 
 
ACOs Strategies for Transitioning to Value-
Why OIG Did This Review 
Medicare spending is expected 
Based Care: Lessons From the Medicare Shared 
to exceed $1.5 trillion by 2028, 
Savings Program  more than double the $708 
billion in spending in 2017.  To 
  help control Medicare 
What OIG Found
spending, while promoting 
As part of the transition to value-based care, 
Medicare Shared Savings Program Accountable  Key Takeaway  high-quality healthcare, CMS 
Care Organizations (ACOs) have developed a  ACOs report a number of  has been implementing 
number of strategies to reduce Medicare  successful strategies in  alternative payment models 
spending and improve quality of care.  This report  reducing Medicare spending  that reward providers for the 
describes the strategies that selected ACOs have  and improving quality of  quality and value of services.  
found successful in reducing spending and  care for patients.  These  This is part of the transition 
improving quality of care.  These strategies  strategies should inform  away from fee-for-service to 
involve working to increase cost awareness in  CMSs broader efforts to  value-based care.  
ACO physicians, engaging beneficiaries to  transform the healthcare  The Medicare Shared Savings 
improve their own health, and managing  system from fee-for-service  Program is part of this 
beneficiaries with costly or complex care needs to  to value-based care.   transition and is one of the 
improve their health outcomes.  Other strategies    largest alternative payment 
that ACOs found successful involve reducing  models.  In this program, 
avoidable hospitalizations, controlling costs and improving quality in skilled nursing  healthcare providers 
and home healthcare, addressing behavioral health needs and social determinants of  voluntarily form ACOs to 
health, and using technology to increase information sharing among providers.  ACOs  coordinate patient care to 
also report challenges in each of these areas and describe the ways they overcame  reduce spending and improve 
them.  quality of care.  Their strategies 
can inform not only current 
The Centers for Medicare & Medicaid Services (CMS) recently made changes to the 
and future ACOs but also other 
Shared Savings Program.  As CMS carries out this and other ACO programs and 
alternative payment models. 
develops new alternative payment models, it should support the use of these 
strategies and other successful strategies that emerge.  These strategies can apply not 
How OIG Did This Review 
only to ACOs but also to other providers committed to transforming the healthcare 
We based this study on a 
system toward value.   
purposive sample of 20 high-
performing ACOs.  These 
What OIG Recommends 
ACOs had reductions in 
We recommend that CMS take the following actions to support efforts to reduce 
Medicare spending and 
unnecessary spending and improve quality of care for patients: (1) review the impact 
provided high-quality care. 
of programmatic changes on ACOs ability to promote value-based care; (2) expand 
efforts to share information about strategies that reduce spending and improve  We conducted structured 
quality among ACOs and more widely with the public; (3) adopt outcome-based  onsite or telephone interviews 
measures and better align measures across programs; (4) assess and share  with key officials from each of 
information about ACOs use of the skilled nursing facility (SNF) 3-day rule waiver and  these ACOs.  We also analyzed 
apply these results when making changes to the Shared Savings Program or other  supplemental documentation 
programs; (5) identify and share information about strategies that integrate physical  provided by these ACOs.   
and behavioral health services and address social determinants of health; (6) identify 
and share information about strategies that encourage patients to share behavioral 
health data; and (7) prioritize ACO referrals of potential fraud, waste, and abuse.  CMS 
concurred with all of our recommendations.
          The full report can be found at oig.hhs.gov/oei/reports/oei-02-15-00451.asp.   
TABLE OF CONTENTS 
BACKGROUND  1 
Methodology  5 
   
FINDINGS   
ACOs are working with physicians to lower costs and improve  6 
quality 
ACOs are engaging beneficiaries to improve their own health  11 
ACOs are managing beneficiaries with costly or complex care  13 
needs 
ACOs are reducing avoidable hospitalizations and improving  15 
hospital care 
ACOs are controlling costs and improving quality in skilled nursing  18 
and home healthcare 
ACOs are addressing behavioral health needs and social  22 
determinants of health 
ACOs are using technology to increase information sharing among  25 
providers 
   
CONCLUSION AND RECOMMENDATIONS   
Review the impact of programmatic changes on ACOs ability to  28 
promote value-based care 
Expand efforts to share information about strategies that reduce  29 
spending and improve quality among ACOs and more widely with 
the public 
Adopt outcome-based measures and better align measures across  29 
programs 
Assess and share information about ACOs use of the SNF 3-day rule  29 
waiver and apply these results when making changes to the Shared 
Savings Program or other programs 
Identify and share information about strategies that integrate  30 
physical and behavioral health services and address social 
determinants of health 
Identify and share information about strategies that encourage  30 
patients to share behavioral health data 
Prioritize ACO referrals of potential fraud, waste, and abuse   31 
   
AGENCY COMMENTS AND OIG RESPONSE  32 
   
APPENDICES   
A:  Detailed Methodology  33 
      B:  Agency Comments  35 
ACKNOWLEDGMENTS  39 
   
BACKGROUND 
Objective 
 
To describe the strategies that selected Accountable Care Organizations 
(ACOs) have found to be successful in reducing spending and improving 
quality of care.   
 
Medicare spending is expected to exceed $1.5 trillion by 2028, more than 
double the $708 billion in spending in 2017.1  To help control Medicare 
spending, while promoting high-quality healthcare, the Centers for 
Medicare & Medicaid Services (CMS) has been seeking new ways to move 
away from a fee-for-service payment model to a value-based payment 
model that rewards providers for the quality and value of services.2  In 
recent years, CMS has implemented a number of alternative payment 
models to achieve these goals.   
The Medicare Shared Savings Program (Shared Savings Program) is one of 
CMSs largest alternative payment models that incentivizes efficient and 
quality care.3  In the program, healthcare providers voluntarily form ACOs 
and enter into a multiyear contract with Medicare.  Providers in each ACO 
coordinate to reduce Medicare spending and improve quality of care.4  If an 
ACO is successful and meets certain Medicare requirements, it is eligible to 
receive a portion of the savings it generates for Medicare.  In 2018, the 
  ________________________________________ 
1 Congressional Budget Office, MedicareCongressional Budget Offices April 2018 Baseline.  
Accessed at https://www.cbo.gov/sites/default/files/recurringdata/51302-2018-04-
medicare.pdf on October 3, 2018.   
2 CMS, CMSs Value-Based Programs.  Accessed at https://www.cms.gov/Medicare/Quality-
Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Value-Based-
Programs.html on October 3, 2018.  See also CMS, Feedback on New Direction Request for 
Information (RFI) Released, CMS Innovation Centers Market-Driven Reforms to Focus on 
Patient-Centered Care, April 23, 2018.  Accessed at https://www.cms.gov/newsroom/press-
releases/feedback-new-direction-request-information-rfi-released-cms-innovation-centers-
market-driven-reforms, on October 3, 2018. 
3 The Shared Savings Program is a permanent program authorized under section 1899 of the 
Social Security Act.  See also CMS, Shared Savings Program: About the Program.  Accessed at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/sharedsavingsprogram/about.html on October 3, 2018. 
4 Shared Savings Program ACOs are eligible for certain fraud and abuse waivers for 
arrangements that meet certain conditions.  These waivers may allow them to implement 
arrangements to achieve their goals that might not otherwise be permissible under the fraud 
and abuse laws.  See 80 Fed. Reg. 66726 (Oct. 29, 2015).   
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Shared Savings Program had 561 ACOs that served 10.5 million 
beneficiaries.5   
In its commitment to transitioning to value-based care, CMS encourages 
ACOs to be innovative and to experiment with creative approaches to 
reduce spending and achieve high quality.  It is important to look at what 
ACOs are doing; these strategies offer learning opportunities to other ACOs, 
including Medicaid and commercial ACOs as well as to participants in other 
alternative payment models.  More broadly, these strategies support the 
overall goal of transforming the healthcare system away from paying for 
volume to paying for outcomes. 
This study is a followup to an August 2017 OIG study.  In that study, we 
found that most ACOs reduced their Medicare spending compared to their 
benchmarks in the first 3 years of the program.6  From 2013 to 2015, the net 
reduction in Medicare spending was nearly $1 billion.  At the same time, 
ACOs improved their performance on the majority of the individual quality 
measures.  OIG also found that high-performing ACOs, in particular, 
maintained a high use of primary care visits, reduced the use of costly 
services such as emergency department visits, and lowered spending by an 
average of $673 per beneficiary for key Medicare services.   
The current study looks at the strategies that selected ACOs have found to 
be successful in reducing spending and improving quality.  We grouped 
these strategies into seven key areas for transitioning to value-based care: 
(1) working with physicians, (2) engaging beneficiaries to improve their own 
health, (3) managing beneficiaries with costly or complex care needs, 
(4) reducing avoidable hospitalizations and improving hospital care, 
(5) controlling costs and improving quality in skilled nursing and home 
healthcare, (6) addressing behavioral health needs and social determinants 
of health, and (7) using technology to increase information sharing among 
providers.  Another OIG review looks in more detail at the extent to which 
ACOs use health information technology to enhance their care coordination 
goals.7   
  ________________________________________ 
5 CMS, Medicare Shared Savings Program Fast Facts, January 2018.  Accessed at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/sharedsavingsprogram/Downloads/SSP-2018-Fast-Facts.pdf on October 3, 2018. 
6 OIG, Medicare Shared Savings Program Accountable Care Organizations Have Shown 
Potential for Reducing Spending and Improving Quality, OEI-02-15-00450, August 28, 2017. 
7 See OIG, Use of Health Information Technology to Support Care Coordination Through ACOs, 
OEI-01-16-00180, May 2019.  An additional review focuses on selected ACOs reporting of 
quality measures.  See the OIG work plan at https://oig.hhs.gov/reports-and-
publications/workplan/active-item-table.asp.  OIG also reviewed how CMS assigns 
beneficiaries to Shared Savings Program ACOs.  See OIG, CMS Ensured That Medicare Shared 
Savings Program Beneficiaries Were Properly Assigned: Beneficiaries Were Assigned to Only 
One Accountable Care Organization and Were Not Assigned to Other Shared Savings 
Programs, A-09-17-03010, October 19, 2017. 
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ACOs 
ACOs vary widely in structure.  Some ACOs are made up entirely of 
physicians, while others include physicians and other entities, such as 
hospitals, nursing homes, and home health agencies (HHAs).  ACOs are part 
of traditional Medicare, and beneficiaries assigned to an ACO may choose 
their own healthcare providers, even if those providers are not a part of the 
ACO.  
Spending Reductions  
ACOs must meet specific requirements to receive shared savings payments.  
Each ACO is accountable for the total cost of care for its assigned 
beneficiaries, even if the care is rendered by providers that are not a part of 
the ACO.8  For each performance year, CMS compares the ACOs spending 
against a benchmark.  CMS calculates each ACOs benchmark by using 
historic spending for assigned beneficiaries.  This amount is adjusted for any 
changes in beneficiary characteristics and projected growth in fee-for-
service spending.  More recently, CMS began to adjust ACOs benchmarks 
based on regional spending trends.   
CMS determines that an ACO generates savings if the ACO spent below its 
benchmark in a performance year.  If the ACO spent above its benchmark, 
the ACO generates a loss.  The degree to which an ACO shares in any 
savings or losses is determined by the risk arrangement it selects when 
entering the program.  ACOs that take on only upside risk may share in the 
savings generated but are not responsible for any losses.9  ACOs that take 
on downside risk may receive a larger proportion of the savings compared 
to ACOs that have upside risk only.  However, they are also responsible for 
sharing in any losses.10 
Quality Measures 
In addition to spending, ACOs are measured on quality based on a number 
of quality measures.  These measures are divided into four domains.  (See 
text box.) 
  ________________________________________ 
8 This includes Medicare Parts A and B spending.   
9 ACOs receive shared savings if they meet or exceed a minimum savings rate.   
10 ACOs are responsible for paying a share of the losses if they meet or exceed a minimum 
loss rate. 
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ACO Quality Measure Domains 
    Patient/caregiver experience.  These measures are based on a 
patient survey that asks about patients ability to access care and 
 
their interactions with their providers. 
 
  Care coordination/patient safety.  These measures cover hospital 
  admissions/readmissions, use of electronic health records, and other 
indicators of care coordination/patient safety. 
 
  Preventive health.  The majority of these measures cover wellness 
 
screenings (e.g., body mass index) and screenings for certain 
diseases (e.g., breast cancer). 
 
  Clinical care for at-risk populations.  These measures cover the 
 
management of certain health conditions (e.g., diabetes, 
hypertension). 
 
Using an ACOs performance on the measures, CMS assigns the ACO an 
overall quality score that can range from 0 to 100.  An ACOs performance 
on the quality measures determines the portion of shared savings that it will 
receive and, in some cases, the portion of the shared losses for which it is 
responsible.  Higher quality scores, such as 90 or above, mean that an ACO 
performed well on the majority of the individual measures, and that the 
ACO will receive a higher proportion of the savings.    
ACO Risk Arrangements 
ACOs entered the Shared Savings Program under one of three tracks that 
varied by risk arrangement up until 2019.  Track 1 offered upside risk only; 
ACOs were allowed to remain in this track for up to 6 years.  The other two 
tracks included both upside and downside risk.  Specifically, Tracks 2 and 3 
offered higher amounts of risk in exchange for a greater amount of shared 
savings.11  In addition, ACOs were allowed to move from the Shared Savings 
Program to the Next Generation ACO Model, which is another Medicare 
ACO model.  In this other model, ACOs have greater downside risk 
compared to Tracks 2 and 3. 
Changes to the Shared Savings Program 
CMS made several changes to the Shared Savings Program for 2019, 
primarily to the timeframe for when ACOs must take on risk.12  Notably, CMS 
modified the contract period from 3 to 5 years and now requires most 
ACOs to take on downside risk by their third year if they do not choose to 
  ________________________________________ 
11 In January 2018, CMS implemented another Medicare ACO model called the Track 1+ 
Model, which offered lower downside risk compared to Tracks 2 and 3.   
12 83 FR 67816.   
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do so earlier.  CMS also established incentives for ACOs to take on 
downside risk earlier in the program.  These incentives relax certain 
coverage requirements for skilled nursing facility (SNF) care and telehealth 
services.13  In addition, ACOs may develop beneficiary incentive programs 
that reward beneficiaries for receiving certain primary care services. 
Methodology  The current study looks at the strategies that selected ACOs have found to 
be successful in reducing spending and improving quality.  We based this 
study on a purposive sample of 20 high-performing ACOs.  For the 
purposes of this report, we defined high-performing ACOs as ACOs that 
had both a reduction in spending relative to their benchmark and an overall 
quality score of 90 or above during their second, third, or fourth 
performance year as an ACO.14  Although all 20 ACOs started in the Shared 
Savings Program, 5 transitioned to the Next Generation ACO Model at the 
time of our review.  
We conducted structured onsite or telephone interviews with key officials 
from each of these ACOs.15  We asked the ACOs to identify the strategies 
that they found successful in reducing Medicare spending and improving 
quality of care.  We also requested and reviewed documentation to 
supplement their responses.  We grouped the strategies from the ACOs into 
seven key areas.  We highlighted common strategies as well as those used 
by individual ACOs.   
See the Appendix for more detailed information about the methodology.  
Limitations  This study is based on a purposive sample of 20 ACOs; therefore, the 
findings cannot be projected to all ACOs in the Shared Savings Program or 
other programs.  Also, the data are self-reported; we did not independently 
evaluate the strategies or confirm the reported results of those strategies.  
Lastly, we did not evaluate ACOs based on their risk arrangement.   
Standards  This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General on 
Integrity and Efficiency. 
  ________________________________________ 
13 ACOs with downside risk may use a SNF 3-day rule waiver to place beneficiaries into a SNF 
without having a prior hospital stay of 3 days or longer.  These same ACOs may use the 
telehealth waiver to provide telehealth services to prospectively assigned beneficiaries in 
non-rural areas rather than only rural areas.  These beneficiaries may also receive telehealth 
services at their home rather than solely in a location designated for telehealth services. 
14 Nineteen of the ACOs met both of these criteria within a single year between 2014 and 
2016.  The remaining ACO reduced spending and had a quality score of 89 in 1 year.  We 
included this ACO to ensure geographic diversity in our sample.   
15 We conducted the interviews between late June and early October 2017. 
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FINDINGS 
The selected, high-performing ACOs have implemented a number of 
strategies they found successful in reducing Medicare spending and 
improving quality of care.16  These strategies fall into seven broad 
categories: 
  Working with physicians 
  Engaging beneficiaries  
  Managing beneficiaries with costly or complex care needs  
  Managing hospitalizations 
  Managing skilled nursing and home healthcare 
  Addressing behavioral health needs and social determinants of 
health 
  Using technology for information sharing 
This report describes the challenges that ACOs faced, the ways they 
overcame these challenges, and the specific strategies they found successful 
in achieving better care at a lower cost.   
WORKING WITH PHYSICIANS
 
ACOs are working  ACOs report that working with physicians in the ACOs is critical to lowering 
costs and improving quality.  However, they note encountering a number of 
with physicians to 
challenges when working with physicians.  ACOs explain that physicians are 
lower costs and 
often unaware of the cost of services and therefore may order more 
improve quality  expensive services than are necessary or refer to specialists without 
factoring in the cost of services.  In addition, physicians are often 
overburdened by administrative tasks, thereby reducing the time they have 
to care for beneficiaries.  ACOs also note that they need to work with 
physicians to address their performance on the quality measures and to 
close gaps in careparticularly regarding screening beneficiaries for 
needed care.  
 
   
  ________________________________________ 
16 We based this study on a purposive sample of 20 high-performing ACOs.  Although all 20 
ACOs started in the Shared Savings Program, 5 transitioned to the Next Generation ACO 
Model at the time of our review.  Throughout this report, we refer to these 20 ACOs as 
ACOs. 
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Recruiting physicians with a commitment to ACO goals   
ACOs commonly recruit physicians who have experience or a demonstrated 
commitment to lowering costs and improving quality.  Some ACOs require 
that their physician practices are recognized as patient-centered medical 
homesa care delivery model in which primary care physicians are 
responsible for coordinating beneficiaries care with other providers.  Other 
ACOs recruit physicians who have participated in other alternative payment 
models to ensure that physicians already have experience with a similar 
payment approach.  In contrast, one ACO accepts all physicians who want 
to join but requires that they make a financial investment and commit to 
attending meetings.  
In addition, several ACOs recruit physicians who have or are committed to 
having an electronic health record (EHR) system.  Two of these ACOs 
require that physicians who do not have an EHR system must select one 
within 1 year of joining.17  EHR systems can allow providers to facilitate 
information sharing and improve care coordination if they are interoperable.     
 
 
 
  ________________________________________ 
17 Although 86 percent of office-based physicians have adopted EHRs nationally, these ACOs 
established this requirement to encourage additional providers to adopt EHRs.  See The 
Office of the National Coordinator for Health Information Technology, Office-based Physician 
Electronic Health Record Adoption.  Accessed at 
https://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php on 
April 17, 2019. 
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Providing data on costs to inform physicians about their practices 
and their referrals to specialists 
Almost all ACOs provide their physicians with customized data to inform 
them about their practices and their referrals.  This information is meant to 
increase physicians 
awareness of the cost of    Changes happen by just making 
services and encourage  [physicians] aware of the data.  
them to consider these 
ACO official 
costs when providing care 
or when making referrals to other providers.  Most ACOs regularly provide 
spending and utilization reports to individual physicians.  For example, one 
ACO provides data on the number of beneficiaries who visited the 
emergency department and asks physicians to seek opportunities to reduce 
the number of avoidable visits.   
A number of ACOs also identify and 
ACOs are in a unique position 
educate physicians with unusual 
to identify potential fraud, 
spending and utilization trends to 
waste, and abuse 
help reduce costs and unnecessary 
services.  These ACOs sometimes  In one example, an ACO analyzed 
compare physicians performance  the referring physicians on home 
relative to their peers or established  health claims and identified 
thresholds.  For example, one ACO  potential fraudulent billing.  It 
educated a group of dermatologists  recommended a fast track for 
with high rates of certain surgeries  ACOs to report potential fraud, 
about the clinical appropriateness of  waste, and abuse. 
certain procedures; this resulted in a 
 
significant reduction in spending for 
the ACO.  Other ACOs use claims data to  identify providers outside of their 
ACOs who serve their beneficiaries and have unusually high spending.  
 
ACOs also have an incentive to review and report questionable billing by 
providers outside of their ACOs because they are accountable for their 
beneficiaries health expenditures billed by those providers.   
In addition, several ACOs provide data to physicians about specialistsboth 
within and outside of the ACOto help them make more informed referrals 
that take into account cost and quality.  These ACOs commonly share key 
information about specialists, such as the cost of their services and whether 
they share information and records with primary care physicians.  According 
to one ACO, providing this information to its physicians can also influence 
specialists practices.  It found that when specialists know that ACO 
physicians are evaluating them for potential referrals, they strive to improve 
the quality and efficiency of their services.   
Other ACOs develop lists of preferred specialists that they share with their 
primary care physicians.  These ACOs often analyze spending and quality 
data to identify specialists who are aligned with the ACOs goals.  Several of 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings Program  8 
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these ACOs also have specific requirements for these specialists.  For 
example, one ACO requires preferred specialists to give timely 
appointments, share their notes with the relevant ACO primary care 
physician within 24 hours, and contact the physician before ordering any 
diagnostic tests.  
Providing information on quality measures and gaps in care   
Most ACOs provide physicians with information about their performance on 
the quality measures and any gaps in care.  They commonly provide 
information about beneficiaries who are overdue for one or more 
preventive services (e.g., breast cancer screenings, which is one of the 
quality measures).  They then encourage physicians to address these gaps 
at annual wellness visits.  In addition, most ACOs evaluate physicians 
practices and provide feedback to physicians about the quality of care they 
are providing.  For example, many ACOs create report cards for physicians 
that evaluate their performance on each quality measure.  One ACO 
provides each physician with a specific quality score that is compared to the 
ACOs overall quality score.  The ACO also assigns a letter grade to each 
physician and provides recommendations to improve the physicians 
performance on specific measures.  In addition, many ACOs educate 
physicians about the quality measures so that they know how to collect and 
report the appropriate data.   
Despite these efforts, ACOs note several ongoing challenges with the 
quality measures.  They report that CMS frequently changes the measures, 
which makes them difficult to 
meet.18  In addition, a few ACOs  ACOs report challenges meeting CMSs 
note that the lack of alignment  quality measures: 
with the measures used in 
 Frequent changes to the quality 
Medicare Advantage and in 
measures are burdensome to providers, 
commercial insurance plans is 
requiring system adjustments and 
problematic.  According to one 
physician re-education.   
ACO, it tracks its providers 
performance on 180 quality   Lack of alignment of the measures to 
measures used in multiple  other payment programs makes data 
programs including the Shared  collection and reporting difficult. 
Savings Program, Medicaid 
 Use of process-based measures rather 
ACOs, and commercial insurance 
than outcome-based measures does not 
always help providers focus on improving 
health outcomes. 
  ________________________________________  
18 For example, in 2017, CMS introduced four n ew quality measures.  Note that CMS can add, 
modify, remove, or replace the Shared Saving Programs quality measures annually through 
rulemaking.  CMS allows ACOs a period of tran sition for new quality measures before the pay 
for performance requirements are implemented.  
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plans.19  Lastly, there are concerns that a number of the quality measures are 
process-based as opposed to outcome-based, such as the measures that 
focus on the percentage of beneficiaries who are screened for certain health 
conditions.20  One ACO notes that certain process-based measures may not 
be as useful because they may not necessarily improve health outcomes 
and can instead contribute to additional costs.  This is further supported by 
a number of researchers.  
Redesigning office workflows 
Most ACOs advise physicians and their practices on office workflows (i.e., 
steps taken by clinicians and staff to accomplish a task) to help them 
address gaps in care and avoid duplicative services.  One ACO provides 
laminated cards to office staff to remind them to check that certain 
screenings are completed.  Another ACO provides each physician with a list 
of actionable items, such as recommendations about which beneficiaries to 
see more frequently during the year.  To avoid duplication in care, one ACO 
has its care management teams meet every morning to discuss their 
patients.  These meetings ensure that each patients care is coordinated 
among the various providers responsible for the care.  In addition, some 
ACOs integrate workflows into physician practices EHR systems.  For 
example, one ACO provides a beneficiary-level dashboard that shows which 
beneficiaries need certain screenings, such as an eye exam or a screening 
for tobacco use.  At the beginning of a visit, the physician or support staff 
reviews the dashboard to identify which screenings to provide on that day.   
Providing administrative and clinical support   
Many ACOs provide administrative support to improve the efficiency of 
physician offices and increase the amount of time that physicians spend 
with beneficiaries, which can improve quality.  A number of ACOs provide 
staff to physicians to perform functions that range from scheduling 
appointments to managing prescription refills.  Several ACOs provide 
clinical support:  they complete preventive health screenings and create 
patient summary reports before beneficiaries see their physicians.  For 
example, one ACOwhich had a large increase in screening for fall risk had 
nurse care coordinators administer these screenings to beneficiaries while in 
the waiting room.  
 
  ________________________________________ 
19 ACOs are required to calculate and submit data for a number of the quality measures for 
the Shared Savings Program.  CMS calculates the data for the remaining measures.  Although 
ACOs are not responsible for these measures, they commonly track their providers 
performance on them throughout the performance year so that they can provide feedback 
to providers and suggest changes in practice when needed. 
20 Process-based measures evaluate what a healthcare provider does to maintain or improve 
health, such as the percentage of beneficiaries receiving a preventive service.  
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ENGAGING BENEFICIARIES
 
ACOs are engaging  Encouraging beneficiaries to take a more active role in their health can lead 
to better health outcomes, quality care, and reduced healthcare costs.21  
beneficiaries to 
However, ACOs note that it is challenging to build relationships between 
improve their own 
physicians and beneficiaries, and thus encourage beneficiaries to get 
health  involved in their own health.   
 
Increasing wellness visits to engage beneficiaries  
To address these challenges, many ACOs focus on increasing beneficiaries 
utilization of annual wellness visits.  ACOs use annual wellness visitswhich 
are different from annual physicalsto 
build relationships between beneficiaries 
  Small differences in lifestyle 
and physicians and to engage 
would make a big difference, 
beneficiaries in their health.  Physicians 
but you have to teach 
conduct health risk assessments and 
[beneficiaries]. 
provide personalized health advice to 
ACO official           
beneficiaries during these visits.  For 
example, one ACO helps physicians identify beneficiaries who have not 
received an annual wellness visit and then helps them set up those 
appointments.  As a result, it increased its rate of these visits from 
15 percent to more than 50 percent in 2017.22  The ACO found that 
beneficiaries who completed annual wellness visits saw their physicians 
more often throughout the year to manage their conditions.  
 
  ________________________________________ 
21 Kristin L. Carman, Pam Dardess, Maureen Maurer, Shoshanna Sofaer, Karen Adams, 
Christine Bechtel, and Jennifer Sweeney, Patient and Family Engagement: A Framework for 
Understanding the Elements and Developing Interventions and Policies, Health Affairs, 
February 1, 2013.  Accessed at https://www.healthaffairs.org/doi/10.1377/hlthaff.2012.1133 on 
October 3, 2018. 
22 For comparison, CMS found that only 20 percent of Medicare beneficiaries received an 
annual wellness visit in 2016.  See CMS, Beneficiaries Utilizing Free Preventive Services by State, 
2016. Accessed at 
https://downloads.cms.gov/files/Beneficiaries%20Utilizing%20Free%20Preventive%20Services
%20by%20State%20YTD%202016.pdf on October 3, 2018.  
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Educating beneficiaries on healthcare topics  
ACOs also provide direct education and partner with outside entities to 
engage beneficiaries in their own health.  Many ACOs educate beneficiaries 
on healthcare topics, such as 
end-of-life care; they also teach 
One ACO partners with emergency 
beneficiaries how to better 
medical technicians (EMTs) to 
manage specific conditions, such 
educate beneficiaries 
as diabetes.  One ACO also trains 
its care coordinators to conduct  One ACO partners with its areas 
motivational interviews, which is  EMTs to educate beneficiaries who 
a counseling method that aims to  are high utilizers of ambulance 
motivate people to change their  services on when to call an 
behavior.23  Over time, this ACO  ambulance and the availability of 
observed a higher level of  other care options.  It found that 
beneficiary satisfaction with their  beneficiaries are more receptive to 
visits.  The ACO also created a  this outreach due to their familiarity 
patient handbook with guidelines  with the EMTs. 
on what to do for certain   
symptoms, when to visit the emergency department, and when to contact a 
 
primary care provider.  Several ACOs partner with other entities to educate 
their beneficiaries.  For example, one A CO works with a local supermarket 
whose dietician educates diabetic patients on healthy food options as they 
shop.   
   
  ________________________________________ 
23 For more information about motivational interviewing, see The Substance Abuse and 
Mental Health Services Administration, Motivational Interviewing.  Accessed at 
https://www.integration.samhsa.gov/clinical-practice/motivational-interviewing on  
October 3, 2018. 
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MANAGING BENEFICIARIES WITH COSTLY               
OR COMPLEX CARE NEEDS
 
ACOs are managing  Beneficiaries with costly or complex care needs account for a 
disproportionate amount of total healthcare spending.24  These 
beneficiaries with 
beneficiariesas well as beneficiaries who are at future risk of needing 
costly or complex 
high-cost or complex carehave a wide variety of health conditions, such 
care needs  as diabetes, chronic lung disease, or congestive heart failure.  Without 
intervention, their cost of care can dramatically increase over time.  These 
beneficiaries are also especially vulnerable to poor-quality outcomes 
associated with fragmented care.25    
 
Using care coordinators to manage beneficiaries health   
To help manage the care of beneficiaries with costly or complex care needs, 
almost all ACOs use care coordinators.  ACOs typically provide care 
coordinators with a customized list of beneficiaries.  The care coordinators 
monitor these beneficiaries closely and help them transition from one care 
setting to another.  For example, care coordinators ensure that when 
beneficiaries leave the hospital, they have the correct medication and 
equipment, as well as a followup visit with their primary care provider. 
Care coordinators also help beneficiaries schedule appointments and ensure 
that beneficiaries have care plans in place.  In many ACOs, they also 
periodically check with beneficiaries in between physician visits to monitor 
changes in their health.  At one ACO, care coordinators ask beneficiaries 
with chronic obstructive pulmonary disease, congestive heart failure, or 
  ________________________________________ 
24 Susan L. Hayes, Claudia A. Salzberg, Douglas McCarthy, David Radley, Melinda K. Abrams, 
Tanya Shah, Gerard Anderson, High-Need, High-Cost Patients: Who Are They and How Do 
They Use Health Care?, The Commonwealth Fund, August 29, 2016.  Accessed at 
https://www.commonwealthfund.org/publications/issue-briefs/2016/aug/high-need-high-
cost-patients-who-are-they-and-how-do-they-use on October 3, 2018. 
25 Janice L. Clarke, Scott Bourn, Alexis Skoufalos, Eric H. Beck, Daniel J. Castillo, An Innovative 
Approach to Health Care Delivery for Patients with Chronic Conditions, Population Health 
Management. February 1, 2017.  Accessed at 
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5278805/ on October 3, 2018. 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings Program  13 
OEI-02-15-00451   
high-risk diabetes to call and report their health status every day.  If a 
beneficiary reports a condition that requires followup, the care coordinator 
directs the beneficiary to a registered nurse who can request a pharmacy 
consultation to identify any medication errors, or arrange for hospital, home 
health services, or primary care services, if appropriate.  For these 
beneficiaries, the ACO reported over a 43-percent reduction in emergency 
department visits and a 47-percent reduction in hospital readmissions by 
the second year of the program.  
Providing care outside of the physicians office   
Many ACOs also provide additional supportsuch as home visits, 
telephonic support, and monitoring devicesto beneficiaries with costly or 
complex care needs.  These services help manage beneficiaries conditions 
between physician visits. 
Over half of the ACOs have care coordinators or physicians who visit 
beneficiaries in their homes.  One ACO sends a respiratory therapist to 
beneficiaries with chronic obstructive pulmonary disease, while another 
provides high-risk beneficiaries with at-home services that range from 
blood draws to ultrasounds.  A few ACOs provide home visits by a 
multidisciplinary team, including a physician, pharmacist, and care 
coordinator to address beneficiaries multiple needs. 
Other ACOs offer telephonic support to beneficiaries to help manage their 
conditions between physician visits.  These ACOs provide beneficiaries 24-
hour access to a care coordinator, a physician, or a nurse.  For example, at 
one ACO, care coordinators provide their phone numbers to high-risk 
beneficiaries so that they can call for advice about their health condition.  If 
a call is insufficient to address the beneficiarys concern, care coordinators 
triage the symptoms and coordinate with physicians as needed. 
 
One ACO uses tablets to help manage the health of beneficiaries who 
 
have end-stage congestive heart failure 
   One ACO provides tablets that issue medication reminders to its 
beneficiaries with end-stage congestive heart failure.  It also provides 
them with a scale that transmits information directly to the care 
coordinators.  This allows the ACO to monitor whether a beneficiary has 
gained weight over a short period of time, which is often a sign of a 
serious medical condition in patients with congestive heart failure.  The 
ACO reported that hospitalizations for this group declined, on average, 
from four times a year to once a year.  
 
 
 
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MANAGING HOSPITALIZATIONS
 
 
 
ACOs are reducing  Inpatient hospital care accounts for the largest amount of Medicare fee-for-
service spending, totaling over one-third of total Medicare spending in 
avoidable 
2016.26  However, ACOs note that hospitals are often difficult to engage; 
hospitalizations and 
they also find that hospitals often lack the incentive to lower their costs 
improving hospital  partly because they are reimbursed primarily based on the volume of 
admissions.  ACOs face challenges with reducing avoidable hospitalizations 
care 
and with encouraging beneficiaries to seek alternatives to emergency room 
care when possible.  
         
Expanding access to primary care services 
To help prevent avoidable hospital visits, most ACOs provide additional 
access to primary care services.  Primary care providers in almost half of the 
ACOs have extended hours that include evenings or weekends.  In addition, 
a few ACOs keep a number of appointment times open each day so that 
beneficiaries with urgent needs can be seen on the same day.  A few other 
ACOs guarantee next-day appointments for beneficiaries who visit the 
emergency room but are not admitted to ensure that their concerns are 
addressed in a timely manner.  
In addition, some ACOs make clinicians accessible during off hours so that 
beneficiaries do not automatically seek emergency care.  At one ACO, 
primary care physicians are available at any time for beneficiaries to call to 
help determine whether visiting the emergency room is necessary and to 
inform them about alternatives such as urgent care clinics.  Another ACO 
operates a 24-hour hotline for beneficiaries to call.  Hotline staff triage 
  ________________________________________ 
26 This includes Medicare Parts A and B spending.  See CMS, Medicare Part A and Part B 
Summary: Persons With Utilization, Program Payments, and Cost Sharing for All Original 
Medicare Beneficiaries, by Type of Coverage and Type of Service, Calendar Years 20112016.  
Accessed at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-
and-Reports/CMSProgramStatistics/2016/2016_Utilization.html on October 3, 2018. 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings Program  15 
OEI-02-15-00451   
beneficiaries based on their symptoms and advise an appropriate course of 
action, which may not necessarily be a visit to the emergency room.   
Targeting frequent users of emergency room services  
Many ACOs identify beneficiaries who frequently visit the emergency room 
unnecessarily so that providers can work with them.  Providers in a few of 
these ACOs educate these beneficiaries on alternatives to the emergency 
room.  Other ACOs collect 
information on why these    We tell practices to ask patients: Why 
beneficiaries are visiting  did you go to [the emergency room]?  
the emergency room and  Now some of the practices changed 
create customized  their workflows based on [those] 
solutions for them to  reasons.   
address their needs, such  ACO official 
as connecting them to 
social services.  For 
example, one ACO identified a beneficiary who had 30 emergency room 
visits in a year; by offering a standing weekly appointment with a primary 
care physician, the ACO reduced the number of emergency room visits to 
two the next year.   
Improving care coordination within hospitals   
ACOs that include hospitals as participants often utilize hospitalists
physicians who work exclusively in hospitalsto coordinate and monitor 
their ACO beneficiaries care.  Hospitalists closely review inpatient costs, 
lengths of stay, and quality of care by closely monitoring these beneficiaries.  
One ACO also requires its hospitalists to communicate with the 
beneficiaries primary care physicians, which does not always occur.   
In contrast, ACOs that do not include hospitals as participants are limited in 
their ability to coordinate and monitor their beneficiaries hospital care.  
However, a few ACOs are able to embed their staff into hospitals to actively 
monitor beneficiaries care.  These staff commonly participate in clinical 
rounds and discharge planning, as well as monitor for appropriate lengths 
of stay.  In addition, a few ACOs immediately provide medical records to 
hospitals outside the ACO once they are alerted that their beneficiaries are 
in the emergency room or being admitted to help reduce duplicative 
services.   
ACOs report ongoing challenges with working with hospitals that are not 
participants in their ACO.  These challenges range from not knowing when 
their beneficiaries are admitted, transferred, or discharged to not having 
access to the hospital to monitor their beneficiaries care.  One ACO notes 
that the hospitals in its area commonly arrange appointments for 
beneficiaries to follow up with new primary care physicians after discharge, 
even though these beneficiaries may already have their own primary care 
physicians. 
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Improving care coordination at hospital discharge   
To help ensure smooth and safe transitions from the hospital, ACO staff 
commonly participate in discharge planning, assess beneficiaries post-
discharge needs, and monitor transitions of care.  They often educate 
beneficiaries about their symptoms, arrange for transportation, secure 
medical equipment, and reconcile their medication to reduce errors.  At one 
ACO, a pharmacist works with its beneficiaries to address medication 
adherence issues.  Another ACO reconciles its beneficiaries medication and 
provides 30 days of all medications to beneficiaries when they are being 
discharged from the hospital.  This initiative is targeted toward beneficiaries 
who have numerous medications or who indicate they may not fill their 
prescriptions right away.  As a result of this initiative, the ACO saw a large 
reduction in medication errors and a significant reduction in the hospitals 
readmission rate.  
In addition, ACOs emphasize the importance of followup visits with 
beneficiaries primary care physicians following a beneficiarys discharge 
from a hospital.  These visits ensure that beneficiaries understand their 
instructions and identify any outstanding needs.  Many ACOs schedule 
these visits for the beneficiaries shortly after discharge.  One ACO created 
its own quality measure to ensure that primary care visits occur within 
14 days after discharge.  Another ACO had a 50-percent drop in 
readmissions for beneficiaries with chronic heart failure due to its transition 
of care efforts, combined with scheduling followup visits within 7 days. 
 
   
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MANAGING SKILLED NURSING  
 
AND HOME HEALTHCARE
 
ACOs are controlling  Skilled nursing and home healthcare made up 13 percent of total Medicare 
spending in 2016.27  ACOs note that their ability to coordinate care and 
costs and improving 
influence cost is limited because SNFs and HHAs are not typically included 
quality in skilled 
in the ACOs.  ACOs note challenges forming relationships with these 
nursing and home  providers which may not share the same incentives to lower cost and 
healthcare  improve quality.  
In addition, beneficiaries must be fully-admitted to a hospital for 3 nights to 
qualify for SNF benefits under Medicare Part Areferred to as the 3-day 
rulewhich can potentially limit an ACOs ability to arrange the most 
appropriate and cost-effective care.28  Accordingly, concerns exist that the 
3-day rule can result in unnecessary and costly hospitalizations in instances 
when it is safe to transfer patients directly to a SNF without hospitalization 
or when fewer than 3 days of hospitalization are needed.29 
 
 
 
 
 
 
 
 
 
 
  ________________________________________ 
27 This includes Medicare Parts A and B spending.  CMS, Medicare Part A and Part B 
Summary: Persons With Utilization, Program Payments, and Cost Sharing for All Original 
Medicare Beneficiaries, by Type of Coverage and Type of Service, Calendar Years 20112016.  
Accessed at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-
and-Reports/CMSProgramStatistics/2016/2016_Utilization.html on October 3, 2018. 
28 For additional requirements, see 42 CFR  409.30(a)(1). 
29 See Nicole Fallon, LeadingAge Calls for Elimination of Three-Day Stay Requirement, 
August 28, 2017.  Accessed at http://leadingage.org/legislation/leadingage-calls-elimination-
three-day-stay-requirement on October 30, 2018.  See also US Sibia, JJ Turcotte, JH 
MacDonald, and PJ King, The Cost of Unnecessary Hospital Days for Medicare Joint 
Arthroplasty Patients Discharging to Skilled Nursing Facilities, Journal of Arthroplasty, 
September 2017.  Accessed at https://www.arthroplastyjournal.org/article/S0883-
5403(17)30295-4/fulltext on November 6, 2018.  In addition, note that outpatient stays and 
time spent as an outpatient prior to inpatient admission do not count toward the 3-day 
requirement.  See Medicare Benefit Policy Manual, ch. 8,  10. 
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OEI-02-15-00451   
 
 
Designating certain SNFs and HHAs as preferred providers   
Many ACOs recognize certain SNFsand less frequently, HHAsas 
preferred providers.  Through selective recruiting methods, ACOs enter into 
arrangements with providers that offer low-cost and high-quality care. 30  
Several ACOs review SNFs claims data to evaluate their spending and 
quality to identify SNFs that offer high-value services at a lower cost.  A few 
ACOs recruit SNFs based on CMSs quality rating system, requiring that 
SNFs have at least a three-star rating.31   
In addition, almost half of the ACOs impose specific requirements on SNFs 
or HHAs that want to be preferred providers.  For example, some ACOs 
require that these SNFs or HHAs share data, such as notifications of 
admissions and discharges and information about medications and 
expected lengths of stay.  Other requirements range from mandatory 
participation in meetings with ACO providers to a pledge from SNFs to 
accept all of an ACOs beneficiaries who choose them.  
Embedding staff in SNFs to monitor beneficiaries health   
A number of ACOs embed staff in preferred SNFs.  These ACO staff 
commonly monitor the health of the ACOs beneficiaries and contribute to 
their care plans.  For example, one ACO has a care manager who attends 
  ________________________________________ 
30 Preferred providers benefit by receiving enhanced status on ACOs referral lists.  However, 
while ACOs may designate certain SNFs or HHAs as preferred providers, ACO providers must 
give to beneficiaries a list of available SNFs and HHAs in the geographic area and may not 
steer them to specific SNFs or HHAs.  For more information about beneficiary choice in 
selecting SNFs and HHAs, see 42 CFR  482.43(c)(7). 
31 CMS developed the Five-Star Quality Rating System to help consumers, their families, and 
caregivers compare nursing homes more easily.  See CMS, Five-Star Quality Rating System.  
Accessed at https://www.cms.gov/medicare/provider-enrollment-and-
certification/certificationandcomplianc/fsqrs.html on October 3, 2018. 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings Program  19 
OEI-02-15-00451   
meetings about its ACOs beneficiaries, monitors the implementation of care 
plans, and advocates for changes in treatment when necessary.  Another 
ACOwhich experienced a 19-percent reduction in SNF lengths of stay
provides recommendations about when to discharge beneficiaries, 
particularly focusing on SNFs that typically keep beneficiaries for the 
maximum Medicare payment period.  Another ACOwhich experienced a 
25-percent reduction in SNF lengths of stayembeds advanced clinical and 
geriatric nurses who participate in clinical rounds and monitor their 
beneficiaries progress.  
In contrast, ACOs have less direct staff involvement in home healthcare.  
One ACO holds interdisciplinary care meetings that include an HHA 
representative.  Another ACO has staff who help to ensure that home health 
visits are made and that durable medical equipment is ordered and 
delivered.   
Conducting warm handoffs to improve care transitions 
Several ACOs conduct warm handoffswhere ACO staff are involved in 
an in-person transfer of a beneficiary between different care settings, such 
as a hospital to a SNF or HHA.  These handoffs help build relationships 
between care coordinators, providers, beneficiaries, and their families and 
provide opportunities to clarify or correct information and improve care 
coordination.32  At one ACO, care managers establish relationships with 
beneficiaries prior to discharge from the hospital to facilitate a more 
seamless transition; they are responsible for handing off each beneficiary to 
a post-acute facility and for monitoring his or her care for 30 days after 
discharge.  During this time, they help reconcile medication to prevent any 
errors and ensure that beneficiaries have adequate transportation to 
appointments and that medical equipment is delivered.   
  ________________________________________ 
32 See also Agency for Healthcare Research and Quality, Warm Handoffs:  A Guide for 
Clinicians.  Accessed at 
https://www.ahrq.gov/sites/default/files/wysiwyg/professionals/quality-patient-
safety/patient-family-engagement/pfeprimarycare/warm-handoff-guide-for-clinicians.pdf on 
October 3, 2018. 
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Enlisting primary care physicians to more closely scrutinize care 
needs 
A number of ACOs rely on primary care physicians to more closely 
scrutinize their beneficiaries need for skilled nursing and home healthcare.  
Many ACOs request that they review their orders and care plans for skilled 
nursing and home healthcare and look for unnecessary services.  One ACO 
directs physicians to look at the clinical appropriateness of the care and to 
consider when home 
health is a feasible    We think twice about sending a 
alternative to a SNF, which  patient to a SNFmaybe there are 
is more expensive.   some [patients] who can go home 
Another ACO educates its  with home health.  We think about 
physicians to review home  what is necessary for the patient.   
health orders and  ACO official  
particularly focus on 
physical therapy services that may not be needed.  One ACOwhich 
experienced a 21-percent reduction in SNF per capita spendinginstructs 
its physicians to contribute to its beneficiaries SNF care plans and discharge 
goals. 
Using the SNF 3-day rule waiver for flexibility in accessing needed 
care 
Six of the 20 ACOs were eligible to use the SNF 3-day rule waiver; this 
waiver allows eligible beneficiaries to go directly to an approved SNF from 
their home, the physicians office, or the hospital when their hospital stay is 
shorter than the required 3 days.33  A few of these ACOs found the waiver 
particularly helpful when the beneficiaries otherwise did not qualify for a 
SNF stay and it was unsafe for the beneficiaries to be discharged directly 
home.  One of these ACOs also attributed a reduction in emergency 
department spending to the use of the waiver.  The ACO cited an example 
of a beneficiary who had a history of frequent and inappropriate emergency 
department visits who was able to get needed care at a SNF by being 
directly admitted from his primary care office. 
  ________________________________________ 
33 Medicare covers a SNF stay if the beneficiary has a prior inpatient hospital stay of 
3 consecutive days or more and the hospital stay occurred within 30 days of admission to the 
SNF.  ACOs that take on downside risk are eligible to use the SNF 3-day rule waiver.  See 
CMS, Medicare Shared Savings Program: Skilled Nursing Facility 3-day Rule Waiver Guidance.  
Accessed at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/sharedsavingsprogram/Downloads/SNF-Waiver-Guidance.pdf on October 3, 2018, 
and CMS, Three-Day Inpatient Hospital Stay Requirement for Care in a Skilled Nursing Facility 
Admission Waiver.  Accessed at https://innovation.cms.gov/Files/x/nextgenaco-
threedaysnfwaiver.pdf on October 3, 2018. 
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ADDRESSING BEHAVIORAL HEALTH NEEDS 
AND SOCIAL DETERMINANTS OF HEALTH
 
 
ACOs are addressing  Research has shown a strong association between having a behavioral 
health condition and a high utilization of healthcare services.34  These 
behavioral health 
conditionswhich include mental health and substance use disorderscan 
needs and social 
impact not only a persons quality of life but also his or her health 
determinants of  outcomes.  As several ACOs note, when left untreated, behavioral health 
conditions often result in costly services, such as avoidable emergency room 
health 
visits and longer hospital stays.   
ACOs report a number of challenges with addressing beneficiaries 
behavioral needs.  These most commonly include a lack of behavioral 
healthcare providers, limited availability of data to identify beneficiaries who 
have behavioral health needs, and fragmented approaches to physical and 
behavioral healthcare.   
 
 
Recruiting behavioral health providers 
To address shortages of behavioral health providers, a number of ACOs 
actively recruit behavioral health providers to participate in their ACOs.  
ACOs also encourage their primary care physicians to become more adept 
at recognizing, screening, and treating certain common behavioral health 
conditions, such as depression and anxiety.  One ACO uses telemedicine, 
which allows behavioral health providers in a neighboring State to provide 
services to its beneficiaries. 
 
  ________________________________________ 
34 Susan L. Hayes, Douglas McCarthy, and David Radley, The Impact of a Behavioral Health 
Condition on High-Need Adults, The Commonwealth Fund, November 22, 2016.  Accessed at 
https://www.commonwealthfund.org/blog/2016/impact-behavioral-health-condition-high-
need-adults on July 19, 2018. 
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Using data to identify beneficiaries with behavioral health needs 
To help identify beneficiaries who have behavioral health needs, a few ACOs 
use claims data to look for certain diagnoses of mental illness or patterns of 
medication use.  However, ACOs acknowledge that their data are limited.  In 
general, patient records on substance use disorder diagnoses and 
treatments, and in some States, records on mental health illnesses, may only 
be released to a healthcare provider by patient consent.35  Several ACOs 
supplement their existing data with data from behavioral health screenings 
that their providers conduct about drugs, alcohol, and depression.   
Integrating physical and behavioral healthcare into primary care 
settings 
Several ACOs integrate behavioral healthcare services into their primary 
care settings to address the problems with fragmented care.  For example, 
one ACO is developing multi-disciplinary clinics that include primary care 
physicians, behavioral health providers, and social workers.  As several ACOs 
note, an integrated practice allows for better coordination of care, where 
the primary care physician can more easily monitor whether beneficiaries 
are taking their medication and keeping their appointments.  A few ACOs 
found that an integrated care model is particularly effective in responding 
to the behavioral and physical healthcare needs of people with complex 
conditions, as a single global care plan can be developed to address the 
totality of the beneficiarys needs.  
  
Social determinants of health, such as access to housing and food, can also 
affect health outcomes.  Unmet social needs can potentially increase a 
beneficiarys risk of developing chronic conditions and increase healthcare 
  ________________________________________ 
35 The Substance Abuse and Mental Health Services Administration and The Office of the 
National Coordinator for Health Information Technology, Disclosure of Substance Use 
Disorder Patient Records: Does Part 2 Apply to Me?. Accessed at 
https://www.samhsa.gov/sites/default/files/does-part2-apply.pdf on October 3, 2018. 
 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings Program  23 
OEI-02-15-00451   
utilization and costs.36  ACOs report challenges with identifying beneficiaries 
with unmet social needs and with helping beneficiaries address these needs. 
Incorporating non-medical staff into practices to address unmet 
social needs 
Many ACOs incorporate non-medical staff, such as social workers and case 
managers, into their healthcare practices to better serve beneficiaries who 
have unmet social needs.  These staff members often serve as liaisons to 
community social services and help beneficiaries address a variety of issues, 
such as housing, food, transportation, and medication assistance.  One 
ACO, which embeds therapists and social workers into primary care 
practices, found that this arrangement is less stigmatizing and more 
convenient to beneficiaries. 
Targeting resources to beneficiaries most likely to have unmet 
social needs 
A few ACOs target beneficiaries who they identify as most likely in need of 
these services:  one ACO focuses on high-risk beneficiaries with complex 
needs, whereas other ACOs focus on certain beneficiaries who might benefit 
from additional assistance, such as beneficiaries who struggle with 
medication adherence or beneficiaries who have patterns of avoidable visits 
to the emergency room.  For example, at one ACO, action plans are created 
for beneficiaries who frequently visit the emergency room for a warm bed 
and a meal.  Despite some progress in this area, funding for these services is 
difficult to find.  As one ACO explained, it has difficulty finding sustainable 
sources of funding to support these efforts, as such services are not 
generally reimbursed by Medicare. 
   
  ________________________________________ 
36 CMS, First-ever CMS Innovation Center pilot project to test improving patients health by 
addressing their social needs, January 5, 2016.  Accessed at 
http://www.nihb.org/docs/02172016/cms.pdf on October 3, 2018. 
 
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USING TECHNOLOGY FOR INFORMATION SHARING
 
 
 
ACOs are using  Sharing medical information is helpful to coordinate care among different 
providers and across different settings.  However, ACOs report that they do 
technology to 
not always have access to beneficiaries medical information from other 
increase information 
providersincluding ACO providers and providers outside the ACOthat 
sharing among  are involved in their beneficiaries care.  They note challenges with the 
providers   interoperability of ACO providers systems and with using State and regional 
data systems to communicate with providers outside their ACOs.  Despite 
some ACOs making progress, challenges remain with using technology to 
share information.37  
 
Using one EHR system or developing alternate systems to 
communicate with ACO providers   
Many ACOs have developed strategies to overcome challenges with 
interoperability.  One strategy is to move toward the adoption of one 
system for all providers.  Having a single EHR system helps ACOs ensure 
that data can be shared across all providers.  As a result, one ACO is 
transitioning current providers to an EHR system that most of its providers 
are already using.   
However, not all ACOs are able to move toward one system and many 
ACOs have multiple EHR systems.  Some of these ACOs have developed 
other ways for their providers to share clinical information.  Several ACOs 
have a secure communication system where providers can quickly message 
each other.  As one ACO describes, embedding a secure direct messaging 
service into every EHR system allows its providers to easily communicate 
data even without interoperability.  In addition, several other ACOs have 
their providers upload beneficiaries medical records to a secure data 
warehouse so that all providers can access data in a single location.  
  ________________________________________ 
37 For more information about ACOs use of technology, see OIG, Use of Health Information 
Technology to Support Care Coordination Through ACOs, OEI-01-16-00180, May 2019. 
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OEI-02-15-00451   
According to one of these ACOs, this method helps the ACO improve 
coordination of care among its primary care physicians and specialists.  
Despite this progress, some ACOs continue to note challenges with having 
multiple EHR systems, mainly that it is difficult to share clinical information 
among providers and to 
aggregate data for analyses and  Challenges with sharing 
quality reporting.  A few ACOs  information: 
further note that certain vendors 
 Lack of EHR interoperability 
add barriers to extracting and 
makes it difficult to share clinical 
sharing data between EHR 
information among providers 
systems and offer solutions that 
can be very costly to overcome.    Potential information blocking
They cite examples of potential  interfering with or discouraging the 
information blocking, which is  use or exchange of information 
when an entity is likely to interfere 
 Not all health information 
with, prevent, or materially 
exchanges (HIEs) are fully 
discourage the access, use, or 
functional, comprehensive, and 
exchange of electronic health 
easy to use 
information.38  At an ACO with 47 
 
different systems, the ACO notes that connecting to other EHR systems is 
cost prohibitive.  Another ACO agrees t hat the cost is extremely high to 
connect its systems and that this problem impedes patient management.  A 
third ACO notes that the cost to export data from its systems to other 
systems is immense, which limits its ability to coordinate care. 
Using State and regional data systemshealth information 
exchangesto communicate with providers outside their ACOs 
Almost half of the ACOs receive information from providers that are not in 
their ACO through the use of the State or regional HIEs.  These exchanges, 
which are created through State or 
regional public-private  One ACO shares HIE information 
partnerships, are designed to help  through its mobile application 
providers share patient clinical 
One ACO developed a mobile 
information in a timely and 
application that pulls information 
coordinated manner.  They 
from the States HIE and sends 
generally include real-time reports 
real-time alerts on hospital 
on hospital admissions, 
admissions, discharges, and 
discharges, and transfers.  ACOs 
transfers to the appropriate 
can use these data to track the 
physicians.   
services their beneficiaries receive 
 
  ________________________________________ 
38 For more information, see 42 U.S.C.  300jj-52.  In March 2019, the Office of the National 
Coordinator for Health Information Technology issued a proposed rule implementing the 
information-blocking statutory provision and defining related exceptions (84 Fed. Reg. 7424 
(Mar. 4, 2019)).  For more information on reporting complaints, see 
https://www.healthit.gov/sites/default/files/information_blocking_complaints_flyer.pdf. 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings Program  26 
OEI-02-15-00451   
from providers outside the ACO and coordinate care when needed.  ACOs 
with access to comprehensive HIEs said that they appreciate having the 
resource; one ACO noted that it found HIE data to be critical to its 
operations. 
In contrast, a number of ACOs are either located in States that do not have 
HIEs or note drawbacks to their existing HIEs.  Several of the ACOs with 
existing HIEs explain that their State or regional HIEs are cumbersome, not 
fully operational, or lacked sufficient data.  For example, one ACO that 
borders a neighboring State found that its HIE lacks data from the hospital 
in the neighboring State that receives most of its beneficiaries in need of 
hospitalization.  Another ACO found that its State HIE requires beneficiaries 
to opt-in, making the system less useful for its purposes.  As a result, this 
ACO partners with area hospitals and designed its own system that provides 
daily notifications about its beneficiaries hospital admissions, discharges, 
and transfers. 
 
 
 
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CONCLUSION AND RECOMMENDATIONS 
Through the Medicare Shared Savings Program, CMS is tying shared savings 
payments to the quality and value of the care provided.  The program 
rewards effective and efficient providers and moves away from fee-for-
service payment. 
As part of the transition to value-based care, Medicare Shared Savings 
Program ACOs have implemented a number of strategies they found 
successful in reducing spending and improving quality of care.  These 
strategies involve working with ACO physicians so they become more aware 
of costs, engaging beneficiaries to improve their own health, and managing 
beneficiaries with costly or complex care needs.  Other strategies that ACOs 
found successful involve reducing avoidable hospitalizations and controlling 
costs and improving quality in skilled nursing and home healthcare.  
Additional strategies involve addressing behavioral health needs and social 
determinants of health and using technology to increase information 
sharing among providers.   
These strategies demonstrate important steps forward in the effort to 
reorient the healthcare system away from a fee-for-service model toward a 
model that rewards providers for greater efficiency and better quality of 
care.  These strategies are also in line with the broader goals of making 
providers accountable navigators of the health system and preventing 
disease before it occurs or progresses.   
CMS recently made changes to the Shared Savings Program.  As it carries 
out this and other ACO programs, administers other alternate payment 
models, and develops new ones, it should continue to support the use of 
these strategies and other successful strategies that emerge.  These 
strategies may apply not only to ACOs but also to other providers 
committed to transforming the healthcare system toward value.  To help 
meet this goal, we recommend that CMS do the following:   
Review the impact of programmatic changes on ACOs ability 
to promote value-based care 
CMS should review the impact of recent programmatic changes to ensure 
that ACOs can continue to be successful in their movement toward value-
based care.39  CMS should conduct this review to determine the extent to 
which ACOs are participating in the program and the extent to which ACOs 
are reducing spending and improving quality.  In addition, it should use its 
  ________________________________________ 
39 For detailed information on the changes to the Shared Saving Program, see 83 FR 67816. 
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review to inform its decisions when making changes to other alternative 
payment models and when developing new models. 
Expand efforts to share information about strategies that 
reduce spending and improve quality among ACOs and more 
widely with the public 
ACOs have implemented a number of strategies to reduce spending and 
improve quality.  These strategies have focused on key areas, such as 
targeting costs and quality associated with physicians, hospitals, and skilled 
nursing and home healthcare.  CMS should expand on its ongoing 
information sharing about strategies and lessons learned, including sharing 
the information in this report.40  It should share this information with ACOs, 
and more widely.  To the extent possible, it should make this information 
public so that healthcare providers may use this information to improve the 
cost and quality of the healthcare they provide. 
Adopt outcome-based measures and better align measures 
across programs 
As noted in the report, the use of process-based measures, rather than 
outcome-based measures, does not always help providers focus on 
improving health outcomes.  ACOs also note the need to align measures 
across different programs.  CMS has a number of initiatives and processes in 
place, such as the Core Quality Measures Collaborative and Meaningful 
Measures initiative, to ensure that measures are outcome-based where 
possible and to further standardize measures across different programs and 
models. 41  CMS should continue to ensure that these efforts result in well-
aligned outcome-based measures as intended, or if needed, CMS should 
pursue other efforts. 
Assess and share information about ACOs use of the SNF 3-day 
rule waiver and apply these results when making changes to 
the Shared Savings Program or other programs 
ACOs in performance-based risk tracks of the Shared Savings Program have 
been able to use the SNF 3-day rule waiver for added flexibility in accessing 
covered care for their beneficiaries.  CMS should identify and collect 
information about ACOs experiences and outcomes in using this waiver and 
how it has affected ACO performance.  This information should include, for 
example, the types of patients who benefit from shorter hospital stays or 
  ________________________________________ 
40 CMS recently shared a number of care coordination strategies used by ACOs to ensure 
that beneficiaries receive both high-quality and efficient care.  See CMS, Care Coordination 
Toolkit, March 2019.  Accessed at https://innovation.cms.gov/Files/x/aco-carecoordination-
toolkit.pdf on April 16, 2019. 
41 CMS recently reduced the number of quality measures in the Shared Savings Program 
from 31 to 23, with the majority being outcome-based measures.  See 83 Fed. Reg. 59452, 
59715 (Nov. 23, 2018). 
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OEI-02-15-00451   
from going directly to a SNF without prior inpatient hospitalization.  It 
should then share this information with other ACOs, providers, and 
stakeholders more widely.  CMS should also use these results in determining 
whether to make changes to the Shared Savings Program.  Additionally, 
CMS should determine whether and how to further incorporate this waiver 
into other alternative payment models or programs. 
Identify and share information about strategies that integrate 
physical and behavioral health services and address social 
determinants of health 
A persons health outcomes can be negatively impacted by unaddressed 
issues related to behavioral health and social determinants of health.  ACOs 
report challenges with addressing these issues because they are not easily 
identified and resolved within a medical care setting.  CMS should continue 
to identify and gather information from CMS initiatives that encourage 
behavioral health integration, as well as other strategies used by providers 
or organizations.  CMS has taken a number of steps to encourage 
integration of physical and behavioral health services.  For example, in 
Medicare, CMS recently instituted new Medicare payment codes for 
individual providers, Federally Qualified Health Centers, and Rural Health 
Clinics to encourage behavioral health integration.42  In Medicaid, certain 
States are using health homes to provide these services and are including 
behavioral health in their quality and performance metrics for Medicaid 
ACOs.   
CMS should also facilitate sharing of information about various strategies 
and resources that ACOs utilize to address social determinants of health.  
For example, an ACO may partner with community organizations, such as 
local Area Agencies on Aging, to help clinicians identify and coordinate 
social services for beneficiaries who need them.  CMS should facilitate 
information sharingthrough the development of case studies, tool kits, 
and other methodsto encourage additional ACOs to utilize successful 
strategies. 
Identify and share information about strategies that encourage 
patients to share behavioral health data  
CMS should promote improved access to behavioral health data for ACOs.  
When physicians have access to both physical and behavioral health data, 
they can better meet their beneficiaries needs and improve their health 
outcomes.  Currently, ACO providers and others only have access to data on 
substance use disorder treatments when they obtain written consent from 
  ________________________________________ 
42 To meet the criteria for the payment codes (HCPCS codes G0502, G0503, G0504, G0507, 
and G0512), providers must furnish services under a behavioral health integration care 
approach. 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings Program  30 
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their beneficiaries.43  CMS should identify and share with ACOs the various 
approaches physicians take to discuss the need for behavioral health data 
with their beneficiaries.   
Prioritize ACO referrals of potential fraud, waste, and abuse  
As noted in the report, ACOs have the ability to uncover potential fraud, 
waste, and abuse by identifying patterns of unusual billing by a wide range 
of providers.  This includes providers that participate in the ACO and those 
that do not.  ACOs access to claims data for their assigned beneficiaries and 
their ability to analyze billing patterns gives ACOs a unique perspective that 
can be utilized for program integrity purposes.  To that end, CMS should 
ensure that referrals from ACOs are provided a heightened level of 
attention commensurate with the quality of these referrals.  This could 
involve changes to CMSs process for receiving or reviewing referrals from 
ACOs or assigning these referrals a higher level of priority within its existing 
reporting process.44  Additionally, when CMS suspects fraud, whether 
reported by ACOs or by individual providers, it should continue to refer 
those cases to OIG.    
  ________________________________________ 
43 HHS currently seeks public input on ways to promote information sharing for treatment 
and care coordination through modifications to the Health Insurance Portability and 
Accountability Act rules.  It is considering rulemaking that would allow covered entities to 
share patient information on substance use or serious mental illness with family members, 
caregivers, and others who are in a position to avert threats of harm to health and safety.  
See 83 FR 64302. 
44 CMS stated that it would create a fast-track process for value-based model providers, such 
as ACOs, to report potential fraud.  See video at 
https://www.congress.gov/committees/video/house-ways-and-
means/hswm00/3VJAHBWYOZQ.  Accessed on March 7, 2019. 
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AGENCY COMMENTS AND OIG RESPONSE 
CMS concurred with all of our recommendations. 
In response to our first recommendation, CMS stated that it uses the 
performance results of the ACOs for program operations and policy 
planning and that it regularly reviews changes in ACO and clinician 
participation to help inform policy and operational changes to the program 
and to inform model development to promote value and reduce burden.  
In response to our second recommendation, CMS stated that it will continue 
to update and expand the information it makes available to ACOs through 
its peer-to-peer learning forum.  In addition, it will continue to make 
information about strategies publicly available as it had with its recently 
released ACO Care Coordination Toolkit and case studies.  
In response to our third recommendation, CMS stated that as part of its 
annual process for measure selection, it is transitioning toward more 
outcome-based measures while balancing the need for important process-
based measures. 
In response to our fourth recommendation, CMS stated that it reviews 
program requirements as part of the annual reconciliation process for the 
program and considers whether changes should be proposed through 
annual rulemaking.  It also provides ACOs with individual quarterly reports 
that include details on the use of waivers by ACOs.  It also noted that it has 
shared information about strategies for using the SNF 3-day rule waiver as 
part of the ACO Care Coordination Toolkit. 
In response to our fifth and sixth recommendations, CMS stated that it will 
continue to update and expand the information it makes available to ACOs 
through its peer-to-peer learning forum.  CMS also noted that its recently 
released ACO Care Coordination Toolkit provides information about how 
ACOs address social determinants of health and the behavioral healthcare 
needs of their beneficiaries. 
In response to our seventh recommendation, CMS stated that it will ensure 
that referrals from ACOs are provided a heightened level of attention 
commensurate with the quality of these referrals. It will also continue to 
ensure that ACO referrals are reviewed to determine whether they are 
actionable, and that cases of suspected fraud are referred to OIG.   
We appreciate CMSs current efforts relating to the different areas covered 
in the recommendations.  At the same time, we encourage CMS to take 
additional steps beyond its current efforts to address the recommendations 
in this report.     
For the full text of CMSs comments, see Appendix B. 
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APPENDIX A: Detailed Methodology 
We based this study on an analysis of interview data and supplemental 
documentation from a purposive sample of 20 high-performing ACOs.  We 
analyzed the strategies they reported to reduce spending and improve 
quality.  
Selection of ACOs 
We selected a purposive sample of 20 high-performing ACOs.  We selected 
ACOs that were in operation for the first 3 years of the Shared Savings 
Program and were still active at the time of our review.  For the purposes of 
this report, we defined high-performing ACOs as ACOs that had both a 
reduction in spending relative to their benchmark and an overall quality 
score of 90 or above in their second, third, or fourth performance year as an 
ACO.45  Although all 20 ACOs started in the Shared Savings Program, 5 
transitioned to the Next Generation ACO Model at the time of our review.46  
The 20 ACOs varied by size, geographic coverage, provider composition, 
and risk arrangement.47 
Structured Interviews with ACO Officials  
We conducted structured onsite and telephone interviews with officials from 
the 20 selected ACOs.  The officials typically included senior-level 
executives, operations officers, medical directors, quality assurance officers, 
compliance officers, population health officers, and data analysts.  We asked 
ACO officials about the strategies that they found successful in reducing 
spending and improving quality.  We grouped these strategies into seven 
key areas.  We highlighted common strategies as well as those used by 
individual ACOs.  We conducted the interviews between late June and early 
October 2017.   
 
  ________________________________________ 
45 Nineteen of the ACOs met both of these criteria within a single year between 2014 and 
2016.  The remaining ACO reduced spending and had a quality score of 89 in 1 year.  We 
included this ACO to ensure geographic diversity in our sample.   
46 The 20 represent ACOs in the three tracks in the Shared Savings Program that were in 
operation during our sampling timeframeTrack 1, Track 2, and Track 3.  In addition, five of 
the ACOs started in the Shared Savings Program and then moved to the Next Generation 
ACO Model.   
47 We determined the size of the ACO based on beneficiary population, which we defined as 
the unique number of final-assigned beneficiaries served by each ACO in 2015.  ACOs varied 
in the following way:  ACOs ranged in size from 5,700 assigned beneficiaries to almost 
150,000 assigned beneficiaries; 8 ACOs comprised only physicians; 7 ACOs had downside risk; 
the ACOs were regionally distributed across the country; and 2 ACOs served rural 
communities.   
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Review of Supplemental Documentation 
We requested and reviewed supplemental documentation from the selected 
ACOs about their strategies.  Examples of this documentation included 
articles authored by the ACO leadership and training material disseminated 
to physicians.  We reviewed this documentation to further understand their 
initiatives. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
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APPENDIX B: Agency Comments 
 
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ACKNOWLEDGMENTS 
Judy Kellis served as the team leader for this study.  Others in the Office of 
Evaluation and Inspections who conducted the study include Grant Conway 
and Michael Novello.  Office of Evaluation and Inspections staff who 
provided support include Althea Hosein.  We would also like to 
acknowledge the contributions of other Office of Inspector General staff, 
including Jessica Swanstrom. 
This report was prepared under the direction of Jodi Nudelman, Regional 
Inspector General for Evaluation and Inspections in the New York regional 
office, Nancy Harrison, Deputy Regional Inspector General, and Meridith 
Seife, Deputy Regional Inspector General. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For more information about this report or to obtain copies, contact the 
Office of Public Affairs at Public.Affairs@oig.hhs.gov.  
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ABOUT THE OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public 
Law 95-452, as amended, is to protect the integrity of the Department of 
Health and Human Services (HHS) programs, as well as the health and 
welfare of beneficiaries served by those programs.  This statutory mission is 
carried out through a nation-wide network of audits, investigations, and 
inspections conducted by the following operating components: 
Office of Audit  The Office of Audit Services (OAS) provides auditing services for HHS, either 
by conducting audits with its own audit resources or by overseeing audit 
Services 
work done by others.  Audits examine the performance of HHS programs 
and/or its grantees and contractors in carrying out their respective 
responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, 
abuse, and mismanagement and promote economy and efficiency 
throughout HHS. 
Office of Evaluation  The Office of Evaluation and Inspections (OEI) conducts national evaluations 
to provide HHS, Congress, and the public with timely, useful, and reliable 
and Inspections 
information on significant issues.  These evaluations focus on preventing 
fraud, waste, or abuse and promoting economy, efficiency, and 
effectiveness of departmental programs.  To promote impact, OEI reports 
also present practical recommendations for improving program operations.   
Office of  The Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of fraud and misconduct related to HHS programs, 
Investigations 
operations, and beneficiaries.  With investigators working in all 50 States 
and the District of Columbia, OI utilizes its resources by actively 
coordinating with the Department of Justice and other Federal, State, and 
local law enforcement authorities.  The investigative efforts of OI often lead 
to criminal convictions, administrative sanctions, and/or civil monetary 
penalties. 
Office of Counsel to  The Office of Counsel to the Inspector General (OCIG) provides general 
legal services to OIG, rendering advice and opinions on HHS programs and 
the Inspector 
operations and providing all legal support for OIGs internal operations.  
General 
OCIG represents OIG in all civil and administrative fraud and abuse cases 
involving HHS programs, including False Claims Act, program exclusion, and 
civil monetary penalty cases.  In connection with these cases, OCIG also 
negotiates and monitors corporate integrity agreements.  OCIG renders 
advisory opinions, issues compliance program guidance, publishes fraud 
alerts, and provides other guidance to the healthcare industry concerning 
the anti-kickback statute and other OIG enforcement authorities.