The Accountable Care Organization (ACO) Investment Model (AIM) saved the Centers for Medicare & Medicaid Services (CMS) more than $48M in its first year while promoting improved health care in rural and underserved areas, according to a new study from Abt Associates.
The new study reveals that after accounting for the $82.4 million provided to ACOs, AIM reduced CMS expenditures by $48.6 million. Decreases in the number of hospitalizations and use of institutional post-acute care contributed to the observed reduction in overall spending. The new findings were published online in the New England Journal of Medicine.
ACO Investment Model Overview
The ACO Investment Model is an initiative developed by the Center for Medicare & Medicaid Innovation (Innovation Center) for organizations participating as ACOs in the Medicare Shared Savings Program (Shared Savings Program). The goal of the Shared Savings Program is for clinicians to deliver high-quality care to the patients who most often visit them while avoiding unnecessary spending.
The ACO Investment Model is a new model of pre-paid shared savings that builds on experience with the Advance Payment Model to encourage new ACOs to form in rural and underserved areas and current Medicare Shared Savings Program ACOs to transition to arrangements with greater financial risk.
How The ACO Investment Model Works
Under AIM, up-front and ongoing payments to ACOs enabled them to overcome those initial operational barriers. CMS recoups the payments from the ACOs’ subsequent savings. ACOs also receive bonuses from CMS if their savings exceed the payments they’ve received from CMS and their quality of care is robust.
As part of the study, Abt analyzed Medicare claims and enrollment data for beneficiaries attributed to 41 AIM ACOs in their first performance year. These data were compared to data for similar beneficiaries who resided in the ACOs’ markets but were served by non-ACO providers. The research finds AIM was associated with a $131 million reduction in aggregate Medicare spending. Through up-front and ongoing payments, CMS invested $76.2 million in ACOs and paid an additional $6.2 million in bonuses.
“With health care and related costs being a concern for most Americans,” said Abt principal associate and study coauthor Betty Fout, “it was encouraging to see evidence that confirmed investments from CMS enabled providers in rural and underserved areas to improve their ability to provide care while reducing Medicare spending.”