Medicaid ACOs

Background

Many ACOs may be interested in working with state Medicaid programs in accountable care arrangements. There is considerable variability across states in regard to Medicaid payment models. Currently only a handful of states have embraced a substantial commitment to the ACO model or a similar version of an accountable care program for their Medicaid beneficiaries. Many others are pursuing various value-based purchasing strategies, and many rely on Medicaid Managed Care Organization (MCO) contractors to serve their beneficiaries. Section 1115 of the Social Security Act allows States to seek waivers from the existing provisions of Medicaid statute to implement demonstration, pilot, or experimental programs. These waivers, which must be approved by the Centers for Medicare and Medicaid Services (CMS), are sometimes accompanied by substantial federal funds. 1115 waivers have been used by many of the states that have developed ACO-like programs.

Below is a working list of states where Medicare-like ACO programs have been implemented for Medicaid beneficiaries. If you do not see your state below and wish to inform us of Medicaid ACO efforts or programs in your state, please contact us at [email protected]. 

State Medicaid ACO Activities

Medicaid ACOs and Social Drivers of Health

Many of the States that organize their Medicaid programs around the ACO model for care delivery have identified social drivers/determinants of health (SDOH) as a critical problem. ACOs are designed to deliver more effective and efficient care, but medical care is only a small part of the factors affecting health outcomes. In fact, studies have shown that social drivers contribute more significantly to health outcomes than medical care. While distinct, SDOH and health equity are closely related. Improving health equity and addressing SDOH are critical to delivering high quality care in a cost-effective manner. As the largest payer of health care for low-income populations disproportionately impacted by SDOH and health inequities, many states are requiring or encouraging Medicaid programs and ACOs to address social drivers such as housing stability, food security and nutrition, and access to reliable transportation, often through partnerships with community-based organizations (CBOs). Innovative payment and care delivery models that rely on data provide an opportunity to better understand and highlight existing disparities and to provide the opportunities to tailor interventions based on individual needs. Total cost of care models such as ACOs are incentivized to improve quality while controlling costs, and the upfront investments that ACOs make in technology and infrastructure to provide coordinated care make them uniquely poised to address health inequities and SDOH. NAACOS has a dedicated webpage with information on efforts to address health equity and SDOH in ACOs.

Organizations with Expertise in Medicaid ACO Programs

Additional Resources

Medicaid Population-Based Payment: The Current Landscape, Early Insights, and Considerations for Policymakers (Center for Health Care Strategies, 2022)

  • This report outlines effective design and implementation strategies for Medicaid population-based payment models and includes a landscape of current approaches across states and considerations for policymakers. A panel discussion with officials from three of the states profiled in the report provides an in-depth look into lessons learned from pioneering states.

Medicaid ACOs and Managed Care: A Tale of 2 States (American Journal of Accountable Care, 2022)

  • This descriptive analysis of how Massachusetts and Minnesota differently implemented Medicaid ACO models for their managed care populations includes details on stakeholder engagement, beneficiary attribution, and payment methodologies to inform policymakers on how ACOs can best function in a Medicaid managed care population.

State Delivery System and Payment Strategies Aimed at Improving Outcomes and Lowering Costs in Medicaid (Kaiser Family Foundation, 2022)

  • This issue brief outlines the variety of payment and delivery system reform models used by state Medicaid programs, including ACOs, patient-centered medical homes (PCMHs), and episodes of care. Survey data from 2021 shows there are 12 states with active Medicaid ACO programs.

How Are Payment Reforms Addressing Social Determinants of Health?  Policy Implications and Next Steps. (Milbank Memorial Fund & Duke Margolis Center for Health Policy, 2021)

  • This issue brief discusses how value-based payment reforms can enable organizations to better address SDOH at the population health level, including a summary of commonly used Medicaid mechanisms and state innovations.

SDOH Integration and Innovation: A Manatt Health Report Analyzing Effective Strategies from Medicaid Managed Care States (Manatt, Phelps & Phillips, LLP, 2020)

  • This resource provides a review of a 2020 survey of states’ SDOH initiatives through Medicaid managed care contracts and 1115 waivers, categorizing SDOH initiatives by type of services, targeted populations, and targeted domains.

Quantifying Health Systems’ Investment in Social Determinants of Health, By Sector, 2017-19 (Health Affairs, 2020)

  • This article examines 78 unique programs identified by researchers involving direct financial investments in SDOH by US health systems between January 2017 and November 2019, categorizing each initiative by target area and characteristics of the selected health systems to calculate descriptive statistics on the scope, scale, and focus of the programs.

Medicaid Accountable Care Organizations in Four States: Implementation and Early Impacts (Milbank Quarterly, 2019)

  • This paper examines impacts from State Innovation Model (SIM) grants to implement Medicaid ACOs in Maine, Massachusetts, Minnesota, and Vermont. Flexibility in model design, ability to build on existing reforms, provision of technical assistance to providers, and access to feedback data all facilitated ACO development. Challenges included sustainability of transformation efforts and the integration of health care and social service providers.

Medicaid ACO Landscape (Leavitt Partners, 2019)

  • This paper examines changes in the Medicaid ACO landscape between 2015-2018 and compares Medicaid ACO programs to Medicare and commercial counterparts, indicating that while growth in Medicaid ACOs and covered lives has been slow, evidence demonstrates promising results across states.

Medicaid: Shifting Payment and Delivery Models to Reward Quality and Outcomes (National Conference of State Legislators, 2019)

  • This toolkit was designed to inform state legislators about healthcare payment and delivery reform initiatives in other states, including state-based Medicaid ACOs and other innovative payment and delivery models that reward quality and outcomes.

Addressing Social Determinants of Health through Medicaid Accountable Care Organizations (Center for Health Care Strategies, 2018)

  • This resource explores the business case for addressing SDOH in ACOs, given ACOs’ responsibility for total cost and quality of care, and examines SDOH strategies across 12 statewide Medicaid ACO programs.

State Approaches to Addressing Population Health Through Accountable Health Models and accompanying chart (National Academy for State Health Policy, 2018)

  • This cross-state comparison analyzes accountable health initiatives in various stages of development in 12 states and explores how accountable health models can provide a framework for states to integrate non-clinical population health efforts such as SDOH initiatives into their health systems

Prioritizing Social Determinants of Health in Medicaid ACO Programs: A Conversation with Two Pioneering States (Center for Health Care Strategies, 2018)

  • This discussion focuses on two state Medicaid ACO programs that prioritize SDOH, Minnesota’s Integrated Health Partnerships and Rhode Island’s Accountable Entities.

The History, Evolution, and Future of Medicaid Accountable Care Organizations (Center for Health Care Strategies, 2018)

This issue brief highlights early results from Medicaid ACO programs across the country, exploring key themes and lessons learned from these early adopters. Most states reported positive results, but designing and operationalizing statewide programs can be a significant undertaking.