Association for Public Policy Analysis & Management

The ACO Investment Model (AIM), under the Medicare Shared Savings Program was designed, in part, to encourage ACO formation in rural/underserved areas. We examined the extent to which AIM ACOs served rural areas, reached patients in Health Professional Shortage Areas (HPSAs), and shared markets with other CMS initiatives. Then, we summarized beneficiary characteristics during their first performance year. Lastly, we identified the extent to which AIM ACOs earned shared savings.

We identified Medicare FFS beneficiaries with final assignment to each AIM ACO from claims and financial reconciliation data. For these beneficiaries, we obtained demographic data from the Medicare Beneficiary Summary File and clinical data from the CMS chronic conditions and hierarchical condition category files. We also linked the beneficiary ZIP code to indicators for HPSA and rurality designations. CMS provided data on overlap between AIM ACO assigned beneficiaries and other CMS initiatives.

In 2016, there were 41 AIM ACOs recruited for formation in rural/underserved areas. There were 387,017 beneficiaries assigned to AIM ACOs in rural/underserved areas in 2016 – an average of 9,439 per ACO. Over 60% of beneficiaries served by AIM ACOs lived in a rural ZIP code, and over 60% of beneficiaries resided in Health Professional Shortage Areas (HPSAs). However, nearly all AIM ACOs had some level of market overlap with a non-AIM ACO participating in the Medicare Shared Savings Program or the Next Generation ACO Model, and more than half of AIM ACOs overlapped with a CMS bundled payment initiative. Nearly 25% of beneficiaries were dually eligible for Medicaid, 25% were disabled, and 15% were nonwhite. On average, they had 3.3 chronic conditions in the past year. In 2016, 11 of 41 AIM ACOs earned shared savings and all met quality reporting or performance criteria. The average amount earned was roughly $2.4 million. The average rurality and HPSA percentages were similar between those earning and not earning savings.

Our results suggest that pre-paid shared savings may be encouraging ACO participation in underserved areas. Even within these underserved areas, there is a notable presence of other regional and state-level initiatives such as other SSP ACOs and bundled payment participants. In their first year, about a quarter of ACOs participating in AIM earned shared savings, suggesting that while some AIM ACOs were immediately successful in decreasing costs while maintaining quality, others may need additional time to realize savings. Further evaluation is necessary to identify which factors are related with the initial financial success of some AIM ACOs and to determine whether up-front investments resulted in reduced Medicare spending, improved beneficiary outcomes, and better chances for ACO sustainability.

Funding: Centers for Medicare & Medicaid Services, Accountable Care Organization Investment Model Evaluation (HHSM-500-2014-00026I / HHSM-500-T0004)