Early Effects of an Accountable Care Organization Model for Underserved Areas

Background The Centers for Medicare and Medicaid Services (CMS) developed the Accountable Care Organization (ACO) Investment Model (AIM) to encourage the growth of Medicare Shared Savings Program (MSSP) ACOs in rural and underserved areas. AIM provides financial support to eligible MSSP ACOs by means of prepayment of shared savings. Estimation of the performance of AIM ACOs on measures of spending and utilization in their first performance year would be useful for understanding the viability of ACOs located in these areas. Methods We analyzed Medicare claims and enrollment data for a group of fee-for-service beneficiaries who had been attributed to 41 AIM ACOs and for a comparable group of beneficiaries who resided in the ACO markets but were served primarily by non-ACO providers. We used a difference-in-differences study design to compare changes in outcomes from the baseline period (2013 through 2015) to the performance period (2016) among beneficiaries attributed to AIM ACOs with concurrent changes among beneficiaries in the comparison group. The primary outcome of interest was total Medicare Part A and B spending. Results Provider participation in AIM was associated with a differential reduction in total Medicare spending of $28.21 per beneficiary per month relative to the comparison group, which amounted to an aggregate decrease of $131.0 million. Over the same period, CMS made $76.2 million in prepayments and paid an additional $6.2 million in shared savings to ACOs in which shared savings exceeded the prepayments. After we accounted for this $82.4 million in CMS spending, the aggregate net reduction was $48.6 million, which corresponded to a net reduction of $10.46 per beneficiary per month. Decreases in the number of hospitalizations and use of institutional post-acute care contributed to the observed reduction in overall spending. Conclusions With up-front investments, participation in ACO shared savings contracts by providers serving rural and underserved areas was associated with lower Medicare spending than that among non-ACO providers. (Funded by the Centers for Medicare and Medicaid Services.) The Medicare Accountable Care Organization Investment Model encouraged growth of ACOs in rural and underserved areas by providing prepayment of the shared savings available in the Medicare Shared Savings Program. In the first year of the program, providers in such areas who participated in AIM achieved lower Medicare spending than expected had they not participated.