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At least 11 states are adding initiatives resembling accountable care organizations to their Medicaid programs. And many providers who shied away from the Medicare ACO models are interested in the state versions, many of which lack sanctions for providers who fall short of quality and cost benchmarks.
State Medicaid ACOS cover a broad range of approaches that reflect the divergent pri- vate-sector arrangements and payment systems also referred to as ACOS. The Medicaid versions include some that state officials call ACOS but lack key components of the federal ACO models, as well as others that don’t use the term but contain many core ACO features, such as tying provider payments to patient outcomes.
That may be because the label comes with both hype and a burden, said Xiaoyi Huang, assistant vice president for policy at the National Association of Public Hospitals and Health Systems. “Anyone can call something an ACO and not actually be it, or on the flip side no one wants to call it an ACO and they will call it their own thing,” she said. “You just have to figure out if that fits into this accountable care model.”
Neither federal nor state healthcare officials know the exact number of states experimenting with Aco-type programs, but key leaders from both levels of government are closely following the issue. Another gauge of state interest is that 13 states have submitted Medicaid amendments to the CMS to implement the new medical home model, which include aspects of ACOS. Four such amendments have received approval so far, federal officials said.
State interest in adding the concept to control spending growth in their increasingly costly Medicaid programs has surged within the past couple of years, according to health policy experts.
“States are trying to figure out what it means for them and what it means for their
existing systems and where they want their systems to go,” said Kathleen Nolan, director of state policy and programs at the National Association of Medicaid Directors.
Part of the increased interest may stem from the national attention the federal Medicare ACO programs have received. Federal health officials, while not specifically urging ACOS, have consistently pushed states to institute more provider accountability and move their jointly federal- and state-funded Medicaid programs away from the fee-forservice model, those officials said.
“We’re actively engaged with states and have been for quite a while to get states interested in it, and many states are by themselves interested in it,” said Cindy Mann, deputy administrator at the CMS and director of the Center for Medicaid and CHIP Services. “We’re working on broader guidance about how those concepts fit into the Medicaid program.”
Many evolving delivery and payment models attempt to make providers accountable for their patients’ health status, but few do so as explicitly as ACOS. Medical homes, for example, offer upfront payments to physicians to provide additional services, such as coordinating care with other providers. But such preACO initiatives usually lack mechanisms to tie providers’ pay to their patients’ ongoing clinical outcomes—one of the hallmarks of the federal ACO model.
One Medicaid program that is building an Aco-like structure off a longstanding medical home model is in North Carolina. The state Legislature recently added Aco-like features to the Medicaid Community Care of North Carolina program, which dates from the 1990s and assigns a single primary-care provider to coordinate each beneficiary’s care. The state will add shared savings and risk adjustment to the program, under the new state laws, according to national health policy experts following the plans.
Other states are modifying their Medicaid managed-care programs into Aco-type pilots. For example, in January, Hennepin County, Minnesota, launched a two-year expansion of its managed-care program that will provide extra provider payments for up to 10,000 Medicaid beneficiaries. The extra funding will allow longer examinations of patients and increased coordination of care, including mental health and substanceabuse treatment.
However, the county rather than providers will be subject to reduced payments for failing to improve clinical outcomes. “The county is at risk already for many of the services that these patients may need; some are already referred to four different county case workers from different agencies,” said Larry Kryzaniak, chief financial officer at the Hennepin County Medical Center, Minneapolis, which is participating in the program.
In another initiative viewed as an ACOlike model, a Colorado Medicaid program launched in mid-2011 gives providers regular bonus payments for offering extra care to patients. That program also plans to add bonus payments to providers whose patients’ outcomes improve, and providers involved hope it will evolve into a global payment system that pays them a fixed sum for all the care a patient receives instead of fee-for-service payments.
The Denver Health Medical Plan, within which about 70% of the beneficiaries are Medicaid enrollees, began participating in Colorado’s Aco-like initiative—called the Accountable Care Collaborative—this month because it funded more comprehensive care than the plan’s more than 100 primary-care physicians are traditionally paid to provide, said Leann Donovan, executive director of the plan. “It’s also an opportunity for us to collaborate with other providers and the state on best practice initiatives for this population,” she said.
Similar to other Medicaid ACO programs, the Colorado initiative does not penalize providers for poor patient outcomes. Instead, the regional entities that administer the program can face such cuts under the managedcare program.
Several states have not yet implemented their Aco-like Medicaid changes but are expected to complete their plans soon.
One of the most aggressive is part of a broader overhaul under discussion by the governor and legislative leaders in Massachusetts. The Massachusetts Medicaid’s pay-forperformance programs already tie up to 2% of provider payments to patient-outcome measures, and the coming changes—which could be implemented by this summer—are expected to require global payments that increase providers financial risk if their Medicaid patients’ health does not improve.
Utah Gov.gary Herbert,arriving to deliver his budget plan last month,recommended spending $670,000 to administer Medicaid ACOS.
New Jersey Gov. Chris Christie, who wants to save $300 million in Medicaid spending with a pending waiver that includes the use of ACOS to manage costs, called Medicaid “the definition of an out-ofcontrol program” in his budget address last year.
The Denver Emergency Center for Children is a part of Denver Health Medical Plan, which began participating this month in a Medicaid program that incorporates ACO components.