The Impact of ACO Formation on Physician Referrals

This paper examines how primary care providers (PCPs) change their referral patterns to specialists after they join a Medicare Shared Savings Program Accountable Care Organization (ACO). We find that primary-care providers respond differently to ACO formation depending on the degree to which the providers have a pre-existing relationship with specialists in the ACO. Relatively speaking, the smaller the previous PCP-specialist relationship, the bigger the response. We also find that primary-care providers without a pre-existing relationship with ACO specialists make up a large share of the ACOs PCPs and referrals. PCPs that sent a large share of referrals to specialists that join an ACO in the years prior to ACO formation decrease the number of patient they refer to those specialists.