Do Hospitals Participating in Accountable Care Organizations Discharge Patients to Higher Quality Nursing Homes?

Accountable care organizations (ACOs) create incentives for more efficient healthcare utilization. For patients being discharged from the hospital, this may mean more efficient use of postacute care (PAC), including discharging patients to higher quality skilled nursing facilities (SNFs) in an effort to limit readmissions and other costly complications. Public reporting of nursing home quality has been associated with improved performance measures, although improvements in preventable hospitalizations have lagged.¹ Evidence to date suggests that patients attributed to an ACO are not going to higher quality SNFs,^2,3 but these effects may be concentrated in hospitals that participate in ACOs and face stronger incentives to alter their discharge patterns compared with non-ACO hospitals. Therefore, we examined whether hospitals participating in Medicare’s Shared Saving Program (MSSP) increased the use of highly rated SNFs or decreased the use of low-rated SNFs hospital-wide after initiation of their ACO contracts compared with non-ACO hospitals.

We used discharge-level data from the 100% MedPAR file for all fee-for-service Medicare beneficiaries discharged from an acute care hospital to an SNF between 2010 and 2013. We measured the SNF quality using Medicare’s Nursing Home Compare star ratings. Our primary outcome was probability of discharge to high-rated (five star) and low-rated (one star) SNFs.

We utilized a difference-in-differences design. Using a linear probability model, we first estimated the change in the probability of discharge to five-star SNFs (compared to all other SNFs) among all beneficiaries discharged from one of the 233 ACO-participating hospitals after the hospital became an ACO provider compared with before and compared withall beneficiaries discharged from one of the 3,081 non-ACO hospitals over the same time period. Individual hospitals were determined to be “ACO-participating” if they were listed on Medicare’s website as being part of an ACO-participating hospital in the MSSP. ACOs joined the MSSP in three waves: April 1, 2012; July 1, 2012; and January 1, 2013, which were also determined based on information on Medicare’s website. We separately estimated the change in probability of discharge to a one-star SNF (compared to all other SNFs) using the same approach. Models were adjusted for beneficiary demographic and clinical characteristics (age, sex, race, dual eligibility, urban ZIP code, diagnosis-related group code, and Elixhauser comorbidities) and market characteristics (the concentration of hospital discharges, SNF discharges, and the number of five-star SNFs, all measured in each hospital referral region).

We examined a total of 12,736,287 discharges, 11.8% from ACO-participating hospitals and 88.2% from non-ACO-participating hospitals. ACO-participating hospitals cared for fewer black patients and fewer patients who were dually enrolled in Medicare and Medicaid (Table 1), but these characteristics did not change differentially between the two groups of hospitals over our study period. ACO-participating hospitals were also more likely to discharge patients to five-star SNFs prior to joining an ACO (in 2010-2011). After joining an ACO, the percentage of hospital discharges going to a 5-star SNF increased by 3.4 percentage points on a base of 15.4% (95% confidence interval [CI] 1.3-5.5, P = .002; Table 2) compared with non-ACO-participating hospitals over the same time period. The differential changes did not extend to SNFs rated as three stars and above (change of 0.5 percentage points, 95% CI, 1.3-2.8, P = .600).