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

Background: The improvement of medication use is a critical mechanism that accountable care organization (ACO) could use to save overall costs. Currently pharmaceutical spending is not part of the calculation for ACO-shared savings and risks. Thus, ACO providers may have strong incentives to prescribe more medications hoping to avoid expensive downstream medical costs. Methods: We designed a quasinatural experiment study to evaluate the effects of Pioneer ACOs on Medicare Part D spending and utilization. Medicare fee-for-service beneficiaries with Part D drug coverage who were aligned to a Pioneer ACO were compared with a random 5% sample of non-ACO beneficiaries. Outcomes included changes in Part D spending, number of prescription fills, percent of brand medications, and total Part A and B medical spending. We utilized a generalized linear model with a difference-in-differences approach to estimate 2011-2012 changes in these outcomes among beneficiaries aligned with Pioneer ACOs, adjusting for all beneficiary-level demographics, income and insurance status, clinical characteristics, and regional fixed effects. Results: Being in an ACO did not significantly affect Part D spending (-$23.52; P = 0.19), total prescriptions filled (-0.12; P = 0.27), and the percent of claims for brand-name drugs (0.06%; P = 0.23). The ACO group was associated with savings in Parts A and B spending of $345 (P < 0.0001) per person per year. Conclusions: We found that beneficiaries aligned to Pioneer ACOs were not associated with changes in pharmaceutical spending and use, but were associated with savings in Parts A and B spending in 2012.