Attributing Patients To Accountable Care Organizations: Performance Year Approach Aligns Stakeholders’ Interests

The accountable care organization (ACO) model of health care delivery is rapidly being implemented under government and private-sector initiatives. The model requires that each ACO have a defined patient population for which the ACO will be held accountable for both total cost of care and quality performance. However, there is no empirical evidence about the best way to define how patients are assigned to these groups of doctors, hospitals, and other health care providers. We examined the two major methods of defining, or attributing, patient populations to ACOs: the prospective method and the performance year method. The prospective method uses data from one year to assign patients to an ACO for the following performance year. The performance year method assigns patients to an ACO at the end of the performance year based on the population served during the performance year. We used Medicare fee-for-service claims data from 2008 and 2009 to simulate a set of ACOs to compare the two methods. Although both methods have benefits and drawbacks, we found that attributing patients using the performance year method yielded greater overlap of attributed patients and patients treated during the performance year and resulted in a higher proportion of care concentrated within an accountable care organization. Together, these results suggest that performance year attribution may more fully and accurately reflect an ACO’s patient population and may better position an ACO to achieve shared savings.