Characteristics of Rural Accountable Care Organizations (ACOs) – A Survey of Medicare ACOs with Rural Presence

Abstract

Accountable Care Organizations (ACOs) are groups of health care providers, principally physicians and hospitals, who develop a new entity that contracts to provide coordinated care to assigned patients with the goal of improving quality of care while controlling costs. Section 3022 of the Patient Protection and Affordable Care Act of 2010 created the Medicare Shared Savings Program (SSP). The Centers for Medicare & Medicaid Services (CMS) implements this program and has approved SSP contracts in five cycles since 2011, including some that participated in a special demonstration project that provided advance payment (as a forgivable loan). A new ACO Investment Model (AIM) program starts in 2015 that provides initial investment capital and variable monthly payments to ACO participants in rural and underserved areas who may not have access to the capital needed for successful ACO formation and operation. CMS also contracted with 32 organizations under a special demonstration project, "Pioneer ACOs" (as of November 16, 2014, there were 19 remaining).8 At the time of the research reported in this brief, there were 455 Medicare ACOs (Pioneer and SSP). While there is growing literature about ACOs, much remains to be learned about ACO development in rural areas. A previous RUPRI Center policy brief 2 examined the formation of four rural ACOs. The authors found that prior experience with risk sharing and provider integration facilitated ACO formation. This brief expands on the earlier brief by describing the findings of a survey of 27 rural ACOs, focusing on characteristics important to their formation and operation. Prospective rural ACO participants can draw from the experiences of predecessors, and the survey findings can inform policy discussions about ACO formation and operation. Key Findings from 27 Respondents. (1) Sixteen rural ACOs were formed by pre-existing integrated delivery networks. (2) Physician groups played a more prominent role than other participant types (including solo-practice physicians) in the formation and management of these rural ACOs. (3) Thirteen rural ACOs included hospitals with quality-based payment experience, and 11 rural ACOs included hospitals with risk-sharing experience. Twelve rural ACOs included physician groups with both quality-based payment and risk-sharing experience. (4) Managing care across the continuum and meeting quality standards were most frequently considered by respondents to be "very important" to the success of rural ACOs.