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The Effect of the Shared Savings Program on Medicare Part D Spending: Evidence from Rural and Underserved Areas

Chao Zhou, Ph.D.; Lauren M. Scarpati, Ph.D.; Matthew J. Trombley, Ph.D.; and Betty Fout, Ph.D.


January 20, 2021

The Medicare Shared Savings Program encourages groups of providers to participate as accountable care organiations (ACOs) and incentivizes the reduction of Medicare Parts A and B spending while maintaining or improving quality of care. While studies found success among some ACOs in reducing these expenditures, the effects on Part D prescription drugs have not been thoroughly investigated. In this article, Abt researchers determine that Medicare savings attributed to ACOs participating in the ACO Investment Model (AIM), which was targeted towards ACO formation in rural areas, does not result in increased Part D drug spending, and thus does not result in hidden costs to Medicare.