September 22, 2020


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new chart model seeks to continue this success in 2021

ACO Investment Model Saves Medicare $382M Over 3 Years; Caravan Health was Instrumental in Impressive Results 

Join our webinar on 10/23 to learn more about CMS' new CHART model - register here.

CMS has just published the final results showing the success of the ACO Investment Model (AIM), the first program to highlight the promise of value-based payment for rural providers. AIM provided start-up funds to providers to form ACOs. These providers had few resources and could otherwise have been left out of the opportunity to participate in care transformation. AIM ran from 2016 to 2018, and the first- and second-year evaluations showed strong results. The final, third-year results continue to be outstanding, proving that small and rural providers can thrive in value-based payment with the right support.  

The final numbers are more evidence that AIM is the most effective CMS alternative payment model yet. Over the three years of AIM, the ACOs saved $382 million, or an impressive 2.5% for Medicare, even after accounting for the earned shared savings and other AIM payments. In year three, these ACOs saved $38.73 per beneficiary per month with statistically significant reductions in inpatient hospitalizations (-4.0%), hospital outpatient visits (-3.7%), skilled nursing facility stays (-7.8%), and home health episodes (-8.2%). The rate of emergency department visits not resulting in hospital admission decreased by 2.9% while hospital readmissions were reduced by 4.4%.  

One very positive indicator is the high rate of AIM ACOs able to repay their start-up funds through earned shared savings. Of $96.2 million in up-front payments, more than half of the amount has already been recouped. In all, 55.3% of ACOs earned some shared savings and 59.6% returned some or all of the AIM funds to CMS.  

Caravan Health Helped Drive Savings 

In many cases, these smaller rural providers needed additional help to achieve these results. The final evaluation states that ACOs that worked with management companies, such as Caravan Health, were able to achieve greater reductions sooner than other AIM ACOs, though the independent ACOs started to catch up in the last year of the program. CMS specifically points to the role of management companies to explain the large spending reductions. Management companies “were able to provide insight when AIM ACOs formed about which potential infrastructure investments would most likely reduce beneficiary spending.” A management company brings expertise, established workflows, and connections with other providers doing similar work. 

Caravan Health is proud to have sponsored 21 of the 41 small, rural ACOs in AIM, driving a significant part of the cost savings. In addition to providing a roadmap for staffing, technology, and other tools for accountable care, Caravan was able to connect independent rural providers to amass the necessary 5,000 attributed lives for ACO participation. Along the way, Caravan learned that a successful ACO needs far more than 5,000 lives to get sustainable results.  

AIM was a resounding success in encouraging entrants in rural and underserved areas to continue in value-based care. When AIM ended after the 2018 performance year, 62.7% of the ACOs did not renew, but fully or partially joined other ACOs. We saw this among Caravan’s clients, many of which joined one of our collaborative ACOs specifically to take advantage of scale. While the AIM funds were critical to ACO formation, many found they had the tools to continue on their own or with other partners when the support ended.  

Next up for Rural Value-Based Care: CHART Model 

We applaud CMS for recognizing the value of AIM by using some key elements in the new CHART model and its ACO Transformation Track. Participating in CHART will look somewhat different from the original AIM program. The most important difference is that all CHART ACOs will be part of Pathways to Success. That means five year, rather than three-year agreement periods, and a much faster path to risk. Also, all CHART ACOs will be rural, whereas in AIM, there was a small cohort of small, non-rural ACOs.  

Many key components of AIM will remain. ACOs will receive start-up funds that can be repaid by earning shared savings. Unfortunately, size limits on the new CHART ACOs will remain at 10,000 attributed lives. This means that any CHART ACO is at a disadvantage. Caravan Health has shown that larger size is an important factor for ACO success, allowing performance to shine through statistical noise. Caravan’s largest ACO recently earned shared savings of $33 million in 2019, proving our theory that large ACO size makes a difference.  

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