Policy Solutions for Integrating Specialists into Accountable Care Organizations

Abstract Evidence from the Medicare Shared Savings Program (MSSP) suggests that physician-led accountable care organizations (ACOs) outperform hospital-led ACOs—a distinction reflected in the Centers for Medicare & Medicaid’s (CMS) high-revenue and low-revenue ACO classifications. However, the role of hospital employment of specialists in shaping beneficiary attribution and observed ACO spending remains unexplored. Using Medicare 100% Innovator Research data (2022–2024), this study analyses populations across five ACO types: ACOs identified by a CMS Certification Number, High-Risk, High-Specialty, Medium-Specialty, and Low-Specialty. Results show that high-specialty ACOs are highly represented in CMS’ high-revenue designation (75%), while low-specialty ACOs are highly represented in CMS’ low-revenue designation (79%), suggesting that CMS revenue designations reflect differences in specialist participation as much as organizational performance. High-specialty ACOs have higher average per-beneficiary costs than low-specialty ACOs, but these costs are associated with substantially higher patient risk. Notably, concurrent risk adjustment more closely explains observed spending differences between low- and high-specialty ACOs than prospective HCC risk adjustment. With nearly half of Traditional Medicare beneficiaries not in value-based models, these findings underscore the need for policy reforms that more deliberately integrate specialists into ACOs.