How ACOs In Rural And Underserved Areas Responded To Medicare’s ACO Investment Model

Implementation of accountable care organizations (ACOs) has been occurring unevenly across the nation, with rural areas lagging behind their more urban counterparts in ACO establishment (for example, see here, here, and here). To help establish ACOs in more areas of the country, the Centers for Medicare and Medicaid Services (CMS) developed the ACO Investment Model (AIM) to provide participating ACOs with up-front and ongoing monthly payments over 24 months to fund ACO infrastructure investments and staffing. As part of the Medicare Shared Savings Program (SSP), the payments were to be recouped through any shared savings earned by the ACOs that sufficiently decreased costs relative to a financial benchmark, as specified by SSP regulations. Forty-one new SSP ACOs, primarily located in rural and underserved health care markets, joined AIM in 2016 (exhibit 1).

In this blog post, we discuss several noteworthy observations from our evaluation of the AIM ACO implementation and impacts over the three performance years (2016 to 2018), pertaining to:

• AIM ACOs’ close partnerships with management companies;
• Strategies—beyond local care coordination—for reducing spending in dispersed markets; and
• The extent to which single-sided financial risk may suffice to induce care transformations.

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