Decisions, Decisions: ACOs in Medicaid

By Tara Mancini

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 brief 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.