Four of five Mass. pioneer ACOs cut medical spending last year by better coordinating care

In the first year of an experimental program to refashion Medicare, four of five Massachusetts networks of hospitals and physicians were able to slow spending by better coordinating medical care for patients.

The closely watched program, a key element of the Affordable Care Act, changes how providers are paid, putting them on a budget to treat a group of patients, rather than paying them for each individual service. Five of the 32 organizations nationwide that signed up to pioneer the program are from Eastern Massachusetts. They have about 150,000 Medicare recipients in the program.

Four of the five — Partners HealthCare, Steward Health Care, the Beth Israel Deaconess Physician Organization, and the Mount Auburn Cambridge Independent Practice Association — said Tuesday that they spent less on patient care than the Medicare target for 2012, in part by reducing expensive hospital stays. The groups split the savings with Medicare.


The fifth Massachusetts organization — Atrius Health, a large doctors’ group — said it came in 2.1 percent over its budget. It is projecting a $2 million loss on the program and will have to pay Medicare a penalty. The Centers for Medicare and Medicaid Services sets an individual budget, or target, for each participating group, called a pioneer accountable care organization.

Emily Brower, Atrius’s executive director of accountable care programs, said the organization knew that the first year of the program would be difficult. Atrius had an especially aggressive budget because it had a long history of keeping down costs, in part through coordinating care with an advanced electronic medical records system.

“There is still a lot of work we can do,’’ Brower said. That includes deploying visiting nurses to provide care in patients’ homes and doing a better job persuading patients to get tests at an Atrius practice, rather than at a more costly hospital outpatient facility, she said.


Medicare officials called the early results promising. They said Tuesday that 18 of the 32 pioneer accountable care organizations generated savings, while 14 wound up with losses.

The accountable care model, which puts providers at financial risk if the cost of caring for Medicare patients is more than expected but allows them to garner some monetary rewards if they come in under budget.- has become increasingly popular in Massachusetts and is a growing strategy for private insurers, as well.

As part of the program, the groups must also report quality and patient satisfaction results to Medicare. In the first year, they earned incentive payments for reporting their results, but starting this year they must improve to reap extra benefits.

Dr. Donald Berwick, former Medicare chief, said the program is “acquiring momentum.’’

Liz Kowalczyk can be reached at kowalczyk@globe.com.