Early Research: CMS’ ACO Investment Model Saved Money

July 15, 2019
Under AIM, up-front and ongoing payments enable rural ACOs to overcome initial information technology cost barriers

A newly published research study found that a Centers for Medicare & Medicaid Services (CMS) infrastructure investment model saved the agency more than $48 million in its first year while promoting improved healthcare in rural and underserved areas.

CMS developed the Accountable Care Organization Investment Model (AIM) to improve healthcare delivery in rural and underserved areas. Financing and inadequate capital for information technology have been cited by rural providers as significant infrastructure obstacles to ACO participation.

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.

Research and consulting firm Abt Associates led the study of AIM in partnership with the Center for Medicare & Medicaid Innovation, L&M Policy Research and J. Michael McWilliams, M.D., Ph.D., of Harvard Medical School.  Findings were published online in the New England Journal of Medicine.

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. Key findings include:

• 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.

• 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.

“With healthcare and related costs being a concern for most Americans, it was encouraging to see evidence that confirms investments from CMS enabled providers in rural and underserved areas to improve their ability to provide care while reducing Medicare spending,” said Abt Principal Associate and study coauthor Betty Fout, in a prepared statement.

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