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Lowered Spending Among Providers Participating in ACOs in Rural, Underserved Areas

August 14, 2019

Researchers recently sought to better understand how Accountable Care Organization (ACO) participation impacts spending in rural and underserved areas. According to the study results, which are published online in the New England Journal of Medicine, Medicare spending was lower among providers serving in rural and underserved areas who also participated in ACO shared savings contracts.

“The Centers for Medicare and Medicaid Services (CMS) developed the [ACO] Investment Model (AIM) to encourage the growth of Medicare Shared Savings Program (MSSP) ACOs in rural and underserved areas,” explained lead study author Matthew Trombley, PhD, Abt Associates, and colleagues. “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.”

For the study, Dr Trombley and colleagues analyzed Medicare claims and enrollment data for a group of fee-for-service beneficiaries who had been attributed to 41 AIM ACOs. They also observed data on a comparable group of beneficiaries who resided in the ACO markets but were served primarily by non-ACO providers. Additionally, a difference-in-differences study design was used to compare changes in outcomes from the baseline period, 2013 through 2015, to the performance period, 2016.

“The primary outcome of interest was total Medicare Part A and B spending,” the study authors explained.

According to the findings, providers that participated in AIM was associated with a differential reduction in Medicare spending. Among those participating, there was a $28.21 reduction per beneficiary per month relative to the comparable group, which amounted to an aggerate decrease of $131.00 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” they noted.

The study authors explained that the aggregate net reduction was $48.6 million, after accounting for $82.4 million in CMS spending, which corresponded to a net reduction of $10.46 per beneficiary per month.

Finally, Dr Trombley and colleagues observed decreases in the number of hospitalizations and use of institutional post-acute care, which contributed to reductions in overall spending.

“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,” concluded the researchers of the study.

Julie Gould


Trombley MJ, Fout B, Brodsky S, et al. Early effects of an accountable care organization model for underserved areas [published online August 8, 2019]. N Engl J Med. 2019;381:(6):543-551. doi: 10.1056/NEJMsa1816660

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