Since the signing of the Patient Protection and Affordable Care Act (PPACA), accountable care organizations have grown in popularity, with 17.2 million beneficiaries in commercial ACOs and 14.6 million in Medicare ACOs. But there is another category that, while slower in growth, has gained an increasing amount of support at the state level—Medicaid ACOs.
At the start of 2018, there were 1,000 ACOs covering 32.7 million consumers—approximately 11% of the U.S. insured population (294.6 million)—under 1,477 different contracts (see After A Slow 2017, ACOs Grow & Expand Their Contracts In 2018). According to a new report from Leavitt Partners, by the end of 2018 there were 1,013 ACOS, 86 of which were Medicaid ACOs and covering 3.7 million lives (or 5% of the Medicaid population)—see Leavitt Partners Releases “The Medicaid ACO Landscape” White Paper. While this doesn’t seem like much, in the last three years the number of Medicaid ACOs has grown by 40% and are now present in 13 states.
And a quick scan of the environment finds examples of states continuing to make big investments in this model. This summer, the Oregon Health Authority (OHA) announced its intent to award 15 organizations contracts, valued at $6 billion, to serve as Medicaid coordinated care organizations (CCO) for the Oregon Health Plan (see Oregon Awards CCO Contracts To 15 Organizations). If you are unfamiliar with it, the CCO model was established in 2012; the CCOs were required to subcontract with the public behavioral health system in each county, and by 2024, 70% or more of CCO payments will be through value-based reimbursement. CCOs will also be required to spend 12% of total medical expenditures on primary care by 2023 (see We Need More Data on Medicaid ACOs to Determine Drivers of Success).
In Minnesota, the Department of Human Services (DHS), Health Care Administration issued a request for proposals (RFP) to expand Medicaid Integrated Health Partnerships (IHP) with new care delivery models in new geographic regions (see Minnesota To Expand Medicaid Integrated Health Partnerships With New Care Delivery Models In New Geographic Regions). Now in its sixth year, the IHP program has grown from 11 sites and 100,000 beneficiaries, to 24 sites and 460,000 beneficiaries, as well as achieved $213 million in savings (see SDOH, Doncha Know: Innovation Lessons From Minnesota’s Medicaid ACO Program).
Why this push? It’s in the numbers. According to a recent report from RTI International on states participating in the SIM Initiative (see State Innovation Models (SIM) Initiative Evaluation) ACO programs in Maine, Vermont, and Minnesota had a positive impact on emergency department visits:
- Reduced the rate of overall emergency department visits by 3% (Maine), 5% (Vermont), and 7% (Minnesota)
- Reduced the rate of emergency department visits for beneficiaries with behavioral health conditions by 2% (Maine), 6% (Vermont), and 5% (Minnesota)
There is specific market challenge for specialty provider organizations with a high proportion of revenue from Medicaid in those states with pending Medicaid ACOs. ACO models are largely driven by hospital systems—and have a history of “building” specialty services rather than “buying” them. Executives of these specialty provider organizations will need to understand the ACO “roadmap” in their state and develop a strategy to “plug into” that new consumer service system.
For more specifics on Medicaid ACO models, see The 2018 OPEN MINDS Medicaid ACO Trend Update. For more on building those ever-important relationships with ACOs in your state, see How To Build Successful ACO Health Plan Partnerships and Helping ACOs Fill In The Complex Consumer Blanks. And for more on the market impact of ACOs and related market strategy, check out these resources in the OPEN MINDS Industry Resource Library:
- 4 Lessons From ACOs For Managing Downside Financial Risk
- How To Build Successful ACO Health Plan Partnerships
- Building The ‘Next Generation’ Behavioral & Social Service ACO
- New ACO Developments, Same Challenges
- 62% Of ACOs Launched In 2012 Implemented Behavioral Health Initiatives
- 61% Of ACO Contracts Only Include Upside Financial Risk
- Most ACOs Not Ready For Two-Sided Risk Model
- The 2018 OPEN MINDS Medicaid ACO Trend Update
- The 2018 OPEN MINDS Medicare ACO Update: A Four-Year Trends Report
- Half Of ACOs Consider Exiting MSSP Over New Downside Risk Rules
Also mark your calendar to join us on September 12 at The 2019 OPEN MINDS Executive Leadership Retreat, where OPEN MINDS chief executive officer, Monica E. Oss will her keynote address, “The ‘Melting’ Value Chain: How To Position Your Organization For Success In A New Era.”