Decisions, Decisions: ACOs in Medicaid – Say Ahhh! A Children’s Health Policy Blog

Accountable Care Organizations (ACOs) have been in vogue
for some time when it comes to coordinating care for Medicare patients;
however, it is a relatively novel ideal for managing Medicaid populations.
 The populations covered by Medicaid differ vastly from that of Medicare,
and therefore Medicaid ACOs require some different practices. A new policy
from the Center for Health Care Strategies, Inc. outlines the
methods that are emerging in five states designing and implementing ACOs for
low-income populations.

There are many decisions that a state must make when
thinking through the design, implementation, and accountability mechanisms that
will need to be put in place. Interviews with administrators and
stakeholders who have some experience with Medicaid ACOs provide insight into
what appears to be working, and challenges that may surface.  Key issues
discussed include building core capabilities, financial models, design issues,
and the ACOs fit with current systems.

Improving health while lowering costs requires that an
ACO be built on a solid foundation, which according to interviewees includes
managing patients across a spectrum of health and social services.  Yet,
if this is to be achieved, the care must be patient centered and coordinated
across providers.  In addition, the small subset of the population with
complex needs must be targeted to receive high-intensity care and social
supports.  Neither of the first two can be done without a strong data and
analytics infrastructure, in addition to motivated leadership and providers.
 Interviewees stress the importance of buy-in from providers, as well as
community partnerships.

Financial models currently being used range from global
waivers in Oregon and Utah to shared savings in Minnesota and New Jersey, while
Colorado is using a Per-Member, Per-Month (PMPM) model.  Global waivers
necessitate taking on full risk, and therefore may not be as feasible for
provider-led ACOs.  Another option is to slowly transfer more financial
responsibility to providers as their capabilities develop.  

Some design  issues for an ACO to consider include
whether it will be led by physicians, a managed care organization, or both, and
the degree to which it will be standardized.  Provider-led ACO’s  are
said to be positioned to facilitate broader community partnerships. States
 using the MCO-led model  have  the MCO serving as the ACO. This
latter model can work well for organizations that have effectively integrated
payment and care delivery systems.  ACO leadership that is shared by both
physicians and the MCO are touted to be the most effective, as they build on
the strengths of both parties.

When it comes to standardization, an ample amount makes
for easier implementation, regulation, and evaluation. Still, interviewees warn
that excessive standardization thwarts local innovation, and that goal setting
can be more effective.

One last piece of advice that will be mentioned here is
the fit of an ACO with existing systems.  It is suggested that the ACO
take stock of what other resources are already in place, for instance,
community health workers, health homes,  and any data sharing
infrastructure.  It is often beneficial to build upon  the
 groundwork that has already been laid in the community.

The above are just a few of the decisions that any
emerging ACO will have to make. Sharing best practices and challenges is one to
help ACO’s flourish; the role of which is likely to grow in Medicaid as it
expands as an insurer.  Find out more about current state models and read
feedback from their stakeholders.

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