Some of the highest-need, highest risk Medicare beneficiaries are those enrolled in both Medicare and Medicaid.  In current Medicare ACO initiatives, beneficiaries who are Medicare-Medicaid enrollees may be attributed to ACOs.

The Medicare ACO, however, does not have financial accountability for the Medicaid expenditures for those beneficiaries. The Medicare-Medicaid ACO (MMACO) builds on the current Medicare Shared Savings Program and advances efforts to partner with states in transforming the healthcare delivery system.

High Spending Requires New Solutions

There are over 9.7 million dual eligible beneficiaries in the United States. These patients account for 16% and 15% of Medicare and Medicaid beneficiaries respectively, but make up 27% and 39% of costs. Healthcare costs of dual eligible totals roughly $300 billion of the $900 billion spent on Medicare and Medicaid total.

The ACO Medicare-Medicaid Model (MMACO)

The MMACO model is focused on improving quality of care, improved care coordination,  and reducing costs for Medicare-Medicaid enrollees. The MMACO model builds on the Medicare Shared Savings Program, in which groups of providers take on accountability for the Medicare costs and quality of care for Medicare patients. Through the Model, CMS will partner with interested states to offer new and existing Shared Savings Program ACOs the opportunity to take on accountability for the Medicaid costs for their assigned Medicare-Medicaid enrollees. MMACOs can take on accountability for the full spectrum of Medicare Part A, Part B, Medicaid costs, and quality for their patients.

Certain aspects of the Model may vary by state, but the over-arching principles and parameters will be consistent across the Model. If Medicare-Medicaid ACOs in the state generate Medicare savings for their Medicare-Medicaid enrollees, states (as well as the Medicare-Medicaid ACO) may be eligible to share in those savings with CMS.

State Eligibility

The Medicare-Medicaid ACO Model is open to all states and the District of Columbia that have a sufficient number of Medicare-Medicaid enrollees in fee-for-service Medicaid. CMS will enter into participation agreements with up to six states, with preference given to states with low Medicare ACO saturation.

States must follow all rules, including those related to Medicaid coverage, payment and fiscal administration that apply under the approach they are approved to offer. CMS will work with states to determine the appropriate Medicaid authority for their desired approach. State participation in the Model is contingent upon obtaining any necessary approvals and/or waivers from CMS.

CMS seeks to encourage participation from safety-net providers in Alternative Payment Models. Medicare-Medicaid ACOs that qualify as “Safety-Net ACOs” will be eligible to receive pre-payment of Medicare shared savings to support the ACO’s investment in care coordination infrastructure.

MMACO is an example of how future ACOs will address the improvement in population health and care for all high-risk patients in their attributable population.

Author: Lisa Remington is President of The Remington Report, a leading home health and post-acute advisor for strategic planning and business development. Lisa has been  publisher of The Remington Report magazine, the nationwide advisor for post-acute and stakeholders for 25 years.

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