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

Researchers sought to understand how accountable care organization (ACO) participation impacts spending in rural and underserved areas. According to study results published 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 & Medicaid Services (CMS) developed the [ACO] Investment Model (AIM) to encourage the growth of Medicare Shared Savings Program (MSSP) ACOs,” 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.”

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 observed data for a comparable group of beneficiaries who resided in the ACO markets but were served primarily by non-ACO providers. 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 study focused on Medicare Part A and B spending.

According to the study, 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 aggregate decrease of $131 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.” The authors explained the aggregate net reduction was $48.6 million, after accounting for $82.4 million in CMS spending, for a net reduction of $10.46 per beneficiary per month.

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 study authors. —Julie Gould