Jim Lloyd, JD, MPP and Katherine Heflin, MSc

December 19, 2016

Over the last month, national Medicaid policy experts focused on the election may well have missed MassHealth’s notable new foray into delivery system and payment reform. The Commonwealth of Massachusetts’ new accountable care organization (ACO) program — a central part of its $52.4 billion Section 1115 waiver — goes well beyond traditional Medicaid ACO models and, in our view, is headline worthy.

The Commonwealth’s innovative ACO program combines provider-level shared savings and capitated payment arrangements with explicit incentives to address the social determinants of health via partnerships with community-based organizations and flexible services. It melds current Medicaid policy trends around value-based purchasing and social determinants to provide more effective care for low-income and vulnerable populations. MassHealth is a participant in the Center for Health Care Strategies’ Medicaid ACO Learning Collaborative, a national effort made possible by The Commonwealth Fund to accelerate state best practices for new accountable care approaches.

Recently approved by the Centers for Medicare & Medicaid Services, Massachusetts’s waiver provides Delivery System Reform Incentive Payment (DSRIP) funds to support the transition to integrated accountable care by: (1) establishing Medicaid ACOs; (2) launching Community Partners — entities with community-based expertise — that will partner with MassHealth ACOs and MCOs to manage members with complex behavioral health and long-term care needs; and (3) investing in statewide infrastructure to enable and support delivery system transformation.

The Three ACO Models

The MassHealth ACO program, scheduled to launch in December 2017, allows ACOs to choose from three models with different payment and care delivery characteristics, depending on their preferences for MCO and provider relationships. Each model, outlined below, is suitable to different types of provider groups. The ACO program is available to members of MassHealth’s mandatory managed care population (non-dual eligible, under age 65) and while MassHealth enrollees are not required to enter into an ACO, the Commonwealth has created incentives for them to choose this new model via lower copayments and the ability for ACOs to waive referral requirements.

Distinguishing Characteristics of Massachusetts ACO Models

ACO ModelACO Characteristics
Accountable Care Partnership Plan
(Model A)
  • Partners with a single managed care organization (MCO); each Partnership Plan has an exclusive group of primary care providers.
  • Paid a capitated rate and at risk for upside savings and downside losses.
  • Define their own service areas, with MassHealth’s approval.
  • Must meet MCO requirements (e.g., capital reserves).
Primary Care ACO
(Model B)
  • Has an exclusive group of participating primary care providers.
  • Paid through MassHealth’s fee-for-service claims system, including shared savings and losses based on total cost of care and quality performance.
  • Covers behavioral health services via MassHealth’s managed behavioral health contractor.
MCO-Administered ACO (Model C)
  • Part of the PCP network for one or more MassHealth-contracted MCOs.
  • May contract with multiple MCOs; an MCO may also contract with multiple MCO-Administered ACOs.

Community Partners

Criteria For Community PartnersIntegral to each of these three ACO models are community-based organizations that will work with the ACOs, called Community Partners (CPs). CPs will partner with ACOs to meet the unique needs of members with: (1) complex behavioral health needs; and/or (2) complex long-term services and supports (LTSS) needs. Behavioral health CPs will offer comprehensive management of physical health, behavioral health, LTSS, and social service needs, as well as transition and coordination support and health promotion. LTSS CPs will participate in person-centered care planning and care coordination activities with providers to ensure that a member’s LTSS and social service needs are met. Funding for CPs, which will come directly from MassHealth via the DSRIP program, will be based on quality and performance metrics.

Flexible Services

Similar to other ACO programs implemented in Medicaid — in particular, Oregon’s Coordinated Care Organizations — Massachusetts’s ACOs will offer members “flexible services,” which include non-medical services designed to address social needs. Flexible services, as defined by Massachusetts, exclude state plan and waiver services, and must fall into one of five categories: (1) community transition services; (2) home- and community-based services to divert individuals from institutional placement; (3) services to maintain a safe and healthy living environment; (4) physical activity and nutrition; (5) experience of violence support; or (6) other goods and services. MassHealth will be developing policy guidance for ACOs to implement the flexible services in accordance with CMS-approved protocols and the goals of the program.

DSRIP Statewide Investments

In addition to supporting ACOs and CPs, DSRIP funding will be invested in statewide initiatives that help support the goals of the ACO and CP programs. Examples include: (1) support to primary care providers employed at community health centers; (2) support to providers to participate in alternative payment methodologies; (3) investments to reduce the boarding of members with substance use disorders or mental illness in emergency departments; (4) and provider investments to improve accessibility to medical care for people with disabilities.

Massachusetts’s Medicaid ACO program offers an innovative mechanism to integrate community partners and social service organizations into the health care system with the goal of addressing members’ social determinants of health, improving access to care, and bending the cost curve. The flexibility in financial and care delivery arrangements, along with the expansive scope of services, will allow MassHealth to extend delivery system reform and test a unique coordinated care model throughout the Commonwealth’s communities.

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