Accountable care organizations are taking off in the overhauled U.S. healthcare market, with news of provider-payer collaborations becoming almost a daily occurrence. What lies a bit below the surface is states' increasing interest in using the ACO concept, too — as a new way to improve healthcare delivery to Medicaid recipients. And industry experts see potential advantages for hospitals and health systems exploring any or all of these public and private paths toward a collaborative care model.
Under the ACO concept, a set of providers, including hospitals, primary care physicians and specialists, work collaboratively and assume responsibility for a defined patient population across a continuum of care. The overarching aim is to meet performance metrics and deliver efficient, high-quality care at reduced cost. Apart from the Affordable Care Act's shared-savings program for Medicare ACOs, in the private marketplace numerous providers, as well as commercial insurers, are supporting the formation of ACO-like ventures.
“The phenomenon of ACOs has gotten very good traction, certainly on the Medicare and commercial side,” healthcare attorney Bruce Merlin Fried, a partner in the Washington, D.C. office of global law firm Dentons, told Healthcare Dive. “But [the future] depends on what the next regulations look like. If CMS requires two-sided risk [for Medicare Shared Savings Plans], one-third of plans will walk away from the program, and CMS is well aware of this.”
Fried said while it is “still early on the Medicaid ACO side, we're beginning to see growing interest” among states opting for an ACO strategy as opposed to an HMO strategy to cover Medicaid enrollees.
“I think there's a lot of promise for [Medicaid] ACOs, especially in states where doctors are hesitant to participate in HMO networks,” Fried said. “They may feel more comfortable in ACOs.”
Only a few years ago, it was possible to count on one hand the number of states involved in creating Medicaid ACOs. But the concept of using the accountable care model in an effort to save money and improve outcomes is starting to take hold. Now 19 states are using Medicaid accountable care models of some sort, according to the National Academy for State Health Policy.
NASHP cites a common starting ground: The Medicaid accountable care model aims to address lack of coordinated care and use a system of shared incentives to manage utilization, improve quality of care and curb cost growth. Yet the approach varies significantly from state to state in such elements as scope of services, governance, criteria for participation, and delivery system and payment design (e.g., whether to use a fee-for-service or managed-care approach).
Colorado, an early proponent, launched the Accountable Care Collaborative program in 2011 that now covers about half of the state's Medicaid enrollees. The state works with seven Regional Care Collaborative Organizations to connect Medicaid members with providers and social supports.
But challenges are ongoing. The University of Colorado's large hospital system with multiple clinics told MedPage Today that it isn't getting enough data to know which patients it is responsible for. Some primary care doctors said they don't always know when their patients go to the ER or are hospitalized since information doesn't flow well between hospitals and doctors not within their systems.
According to MedPage, Colorado's initial Medicaid ACO program savings were mostly negated by payments to regional coordinators; and while hospital readmissions have fallen for Medicaid accountable care patients, trips to the ER have not.
States including Oregon, Minnesota and Utah are following suit with their own brand of Medicaid ACO programs. But in other states, including North Carolina, state lawmakers are balking at the concept of Medicaid accountable care.
Even with the state legislature's blessing, setting parameters for Medicaid accountable care is challenging for states since the diverse population includes children, pregnant women, and people with multiple chronic illnesses and behavioral health issues.
But many states, facing potentially crippling Medicaid budgets, are taking on the task. The number of states with Medicaid accountable care arrangements is roughly double last year's total, said Andrew Cohen, a vice president at Washington, D.C.-based Avalere Health. He works in the firm's healthcare networks practice, analyzing ACOs and other care models.
Cohen said that how each state approaches accountable care depends on its existing Medicaid platform: whether HMOs or patient-centered medical homes, for example. In general, he said the ACO could be a good delivery and payment model because it incentivizes providers to take responsibility for Medicaid populations and meet specific care needs. On the flipside, he said he expects the Medicaid ACO model to face challenges with federal regulators and state legislators, who must authorize such an approach.
As for hospitals and health systems, Cohen said those providers already involved in commercial ACO-like ventures or Medicare ACOs likely would have an easier transition into a Medicaid ACO model.
“I think many providers will look at it [i.e., a Medicaid ACO] as an opportunity to be able to offer the Medicaid population more comprehensive and coordinated services...and there are financial incentives,” he said. “If quality measures are met and costs reduced, there are payments to providers for doing a good job. So I think a lot of providers would look at it as a positive model.”
