The longest-standing Medicaid program is in Colorado, where the statewide Accountable Care Collaborative launched in 2011. The Colorado program’s Regional Care Collaborative Organizations (RCCOs) are not at financial risk for improving quality and lowering costs (they only share in savings), the state has realized approximately $29 to $33 million in net savings over three years. These savings take into account state investments in data-sharing infrastructure and incentive payments to the RCCOs and primary care medical providers.
Oregon created its Coordinated Care Organizations around the time Colorado launched its Accountable Care Collaborative. The Oregon program, like Colorado, employs regional organizations that receive capitated payments to care for patients with quality incentives phased in.
Utah modified its existing managed care contracts into ACO contracts. The managed care plans will still be paid a monthly risk-adjusted, capitated payment for its beneficiaries. However, payments will now be adjusted depending on the managed care plans’ ability to lower costs and improve quality.
Illinois which spent 20% of its total state budget on Medicaid in fiscal 2012 wants to move half of its Medicaid clients into new care coordination plans by the start of next year. The “Care Coordination Entities” choose to be paid based on a per member per month bonus, a shared savings model, or a model they develop themselves.
Minnesota is in the middle of a 3-year demonstration project that will adjust provider payments upward or downward based on their ability to lower historical spending targets.
New Jersey hopes to start a 3-year Medicaid ACO demonstration project later this year.
Vermont started a program this year in which provider-led ACOs can share in savings if they meet certain quality measures.
Alabama plans to start in 2017 a regional ACO plan where provider-led networks take financial responsibility for Medicaid patients.
“Some of the states are using payment methods like shared savings and enhanced capitated payments based on social service coordination to give ACOs the financial incentive to manage care effectively.”
State Health Policies In Accountable Care
The National Academy for State Health Policy takes a look at state-led activity to promote accountable care.
They found that 17 states are implementing accountable care strategies in Medicaid or state employee health programs. State activity runs the gamut from financing accountable care models to developing state standards that certify public and private accountable care organizations, to aligning accountable care principles with the creation of new community-based organizations or Medicaid managed care organization contracts. As more states begin to use their leverage as health payers, purchasers, and regulators to re-shape healthcare delivery, policymakers can learn from their accountable care design principles and early pilot results.
State Accountable Care Activity
The seven states that are early adopters of Medicaid ACOs have emphasized integrating non-medical social services into care to address the needs of their Medicaid populations. One way to do this is to require ACOs to partner with organizations like local governments service agencies and community-based groups. All of the Medicaid ACOs require coordinating with these local partners. Some loosely define the entities and other states require “meaningful” partnerships with certain organizations such as crisis management programs. Some of the states are using payment methods like shared savings and enhanced capitated payments based on social service coordination to give ACOs the financial incentive to manage care effectively. In addition, some states are planning to expand their data analytics and share information on social services use.
Patterns have begun to emerge in state approaches to fostering accountable care. Some states are explicitly cultivating accountable care organization (ACO) models, in line with federal efforts to use shared savings models in the Medicare program to support these models, while others are fostering the creation of new provider-led organizations not explicitly conceptualized as ACOs.
Maine is designing an Accountable Communities initiative that is designed to mirror the federal Medicare Shared Savings Program.
New York’s Department of Health is launching a program to certify ACOs.
New Jersey plans to launch a 3-year Medicaid ACO Demonstration Project.
Massachusetts will use ACOs, certified by a new Independent Health Policy Commission, as a key component of the state’s cost control strategy.
Texas is developing a certification process for healthcare collaboratives, new entities composed of physicians and providers that can enter into innovative payment arrangements with public and private payers to assume responsibility for a range of healthcare services.
Illinois has launched Care Coordination Entities (CCEs), collaborations of providers and community agencies, governed by a lead entity that receives care coordination payments in order to provide care coordination services.
“Supporting Social Service Delivery through Medicaid Accountable Care Organizations: Early State Efforts,” February 2015
Roopa Mahadevan and Rob Houston, Center for Healthcare Strategies, “Supporting Social Service Delivery through Medicaid Accountable Care Organizations: Early State Efforts,” February 2015
Lisa Remington is president of the Remington Health Strategy Group and publisher of the Remington Report magazine and has worked with more than 6,000 organizations in both a consultancy role and educator. Lisa monitors the complex key trends and forces of change to develop a correct strategic approach to de-risk decision-making and create sustainable futures across the healthcare continuum.