What Makes Successful Rural Accountable Care Organizations Successful?

Research center:
Lead researcher:
Project funded:
September 2016
Project completed:
February 2021

Problem statement: Research in progress by the RUPRI Center shows considerable variation in the financial and quality performance achieved by Accountable Care Organizations (ACOs) that include rural providers. What explains "first-generation" ACO performance variation and continued program participation? What can we learn about the fit of the ACO model with characteristics of rural places from these successes?

Policy relevance: The U.S. Department of Health and Human Services plans to shift at least 50% of traditional Medicare spending into alternative payment models by 2018. ACOs represent a popular model in both the Medicare and Medicaid programs. The Centers for Medicare and Medicaid Services (CMS) has facilitated rural ACO creation through retaining the one-sided risk model (including allowing renewing ACOs to stay in that track), implementing the ACO Investment Model to provide capital to recently formed and new rural ACOs, and proposing benchmark calculations changes that use regional expenditures instead of the plan's attributed beneficiary expenditures only. Understanding the factors that support and sustain ACO success in rural places will guide further policy development, publicly funded assistance/demonstration program design, and strategic rural provider action.

Methods and data sources: A mixed methods design was employed using the following sequence: 1) previous work by the Center analyzing differences across ACOs at a point in time (first year performance) was extended by analyzing performance change over time and took advantage of additional annual data to be released during this project; 2) empirical models that explain performance differences were built and tested using available data, such as number of beneficiaries, number of providers and access points, ACO governance design, and inclusion of providers across the continuum (e.g., long-term supports and services); 3) qualitative data collection (interviews and site visits of high-performance rural ACOs selected based on performance analysis) enabled a deeper understanding of the dynamics involved in redesigning healthcare organizations and strategic plans of ACOs, and both provided context for earlier empirical findings and identified additional variables (including data sources and measurement); 4) empirical models were refined based on qualitative results and tested using quantitative methods. Data sources include plan-specific performance data released by CMS, data about specific ACOs available from their websites and other CMS sources, and data about rural ACOs collected by RUPRI Center researchers and included in our data set.