Acountable Care Organization Investment Model

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Close to one fifth (19.3%) of the American population is rural, according to 2010 census data. Being somewhat removed from urban areas, they have limited access to healthcare. Most hospitals and practices are located in urban and suburban areas where they can reach a greater population. In fact, less than 10% of physicians practice in rural areas. This geographic distance is a discouraging and restrictive factor for people in rural communities attempting to seek the care they need. 

The Centers for Medicare and Medicaid Services are launching a new initiative designed to encourage Accountable Care Organizations (ACOs) to better serve rural areas. The ACO Investment Model will offer financial support and funding up to $114 million for 75 ACOs concentrating their efforts on underserved rural areas. This will ease monetary concerns and enable better care.

The first step is participating in the Medicare Shared Savings Program. Those ACOs that joined the program in 2012 or 2013 will have a deadline of December 1st to apply for the Investment Model. They’ll also receive two types of payments:

  • An upfront, variable payment based on prospective beneficiaries
  • A monthly payment based on the size of the ACO

ACOs that joined in 2014 or will be joining in 2016 will be able to apply in summer 2015 and will receive three types of payments:

  • An upfront, fixed payment
  • An upfront, variable payment based on prospective beneficiaries
  • A monthly payment based on the size of the ACO

The financial incentives of this program are intended to reduce costs of providing health care to underserved areas without compromising the quality of care they receive. The program hopes to emphasize the need in these communities and urge new ACOs to target them.

Author: Apoorva Anupindi