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ACO Investment Model May Improve Care Delivery in Rural Areas

The ACO Investment Model was created to bring more funds to improve infrastructure among accountable care organizations in rural regions.

By Vera Gruessner

While healthcare reform and legislation like the Affordable Care Act have brought medical coverage to an additional 20 million Americans across the country, the patient community still faces some challenges especially in rural areas. When comparing patient communities around the nation, disparities still exist in the care delivered, said Andy Slavitt, Acting Administrator for the Centers for Medicare & Medicaid Services (CMS), at the CMS Rural Health Summit.

State Medicaid Expansion

Slavitt outlined how healthcare delivery is disproportionate in rural regions, which see limited infrastructure and fewer resources while facing higher needs for chronic disease management and treatment. A number of strategies could improve medical coverage and healthcare delivery in rural areas including Medicaid expansion and the ACO Investment Model designed by the CMS Investment Model, explained Slavitt at the summit.

The expansion of the Medicaid program has been “aimed at addressing many of these issues,” but the many states that haven’t expanded Medicaid despite federal funding under the Affordable Care Act are often entirely rural regions. In rural states that have expanded Medicaid, the uninsurance rate is 11 percent. The uninsured rate is 14.6 percent in rural states that didn’t pursue Medicaid expansion.

“Lower volumes, aging and limited infrastructure are real concerns and chronic disease rates and those treatment needs are higher. One significant source of coverage, care and funding aimed at addressing many of these issues is Medicaid expansion. But in almost all the states that have chosen not to expand Medicaid, they are either entirely rural or almost entirely rural,” said Slavitt.

Slavitt is hopeful that the ACO Investment Model designed to assist rural areas improve healthcare delivery by improving payment models will meet its goals. The program puts shared savings gathered from accountable care organizations toward medical facilities in rural regions.

READ MORE: CMS Accountable Care Organization Model Targets Dual Eligibles

The latest results have shown that rural hospitals participating in the value-based ACO Investment Model tend to perform better than urban hospitals on quality and patient safety measures, said Slavitt.

“The ACO Investment Model was designed to help rural communities move down a path receiving better payment for delivering better healthcare — undoubtedly the key to managing through our economic challenges. In this rural-oriented model, we prepay shared savings to ACOs in rural areas – an oxymoron, but a clear acknowledgement that you need to invest when that’s not always easy and a sign of our willingness to invest along with you,” Slavitt continued.

“And in a report we released this morning indicates, for those rural hospitals that participate in value based initiatives, the results reflect many of the strengths we know are in these communities– rural hospitals perform better than urban counterparts,” he concluded.

In July 2015, CMS announced the creation of the ACO Investment Model and opened up the application process. Since then, CMS chose 45 accountable care organizations to participate in the program, according to

The ACO Investment Model was created for the accountable care organizations who have been participating in the Medicare Shared Savings Program. Pre-paid shared savings are used in the new model to further progress toward advanced payment strategies.

READ MORE: Accountable Care Organizations Keep Growing Across US

The ACO Investment Model was created when stakeholders expressed concern that providers did not have the funds needed for the infrastructure that would strengthen their population health management procedures. The shared savings from CMS for this program will help providers invest in the infrastructure necessary to succeed as an accountable care organization.

The entities participating in the ACO Investment Model include Access Care Oklahoma, LLC, Aledade Kansas ACO, LLC, AmpliPHY of Kentucky ACO LLC, Kentucky Primary Care Alliance Region 2 LLC, and the Illinois Rural Community Care Organization LLC. This shows how the program is targeted to boost infrastructure in rural states.

As previously reported, the ACO Investment Model put in $114 million in upfront investment to accountable care organizations in rural and underserved regions. Another important goal of the program is to help Shared Savings Program ACOs transition toward performance-based risk payment arrangements.

“The ACO Investment Model will give Medicare Accountable Care Organizations more flexibility in setting quality and financial goals, while giving them greater accountability for delivering quality care efficiently,” Former CMS Administrator Marilyn Tavenner said in a public statement. “We are working with these organizations to make necessary investments that encourage doctors, hospitals and other health care providers to work together to better coordinate care and keep people healthy.”

The move toward risk-based arrangements, investments in infrastructure, and healthcare delivery improvements would further bring ACOs to lower spending and improve the quality of care.

READ MORE: Why Patients Need More than Reduced Healthcare Spending

The CMS Innovation Center is further looking to close current gaps in care and reform payment in a way to reduce the growth rate in healthcare spending while improving quality and outcomes in urban, suburban, and rural areas around the country. Along with Medicaid expansion, the ACO Investment Model is hoped to achieve the goals of closing disparities in healthcare delivery.


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