Jim Lloyd, JD, MPP

January 19, 2018

In several states across the country, Medicaid accountable care organization (ACO) programs have been operating for more than five years now. Lessons from those early adopters are being used to enhance existing state programs as well as inform states that are newly pursuing ACO programs. Several early innovating states with successful Medicaid ACO programs have already introduced new ACO “versions” — Vermont’s Next Generation Medicaid ACO expands the program’s scope and aligns it with Medicare and commercial efforts, and Oregon’s recent waiver renewal reaffirmed that state’s commitment to its Coordinated Care Organizations, with a focus on addressing social determinants of health and advancing use of value-based payments.

Similarly, Minnesota and Colorado are building on their initial successes and rolling out 2.0 versions of their ACO models. In the first versions of their ACO programs, these two states achieved both improvements in quality of care and cost savings. Minnesota’s Integrated Health Partnerships (IHPs) program consistently added participating organizations and saved the state nearly $156 million in its first three years, reducing inpatient admissions by 14 percent and emergency department visits by seven percent. Similarly, Colorado’s Accountable Care Collaborative demonstrated reductions in costs and utilization as well as growth in enrollment.

Minnesota Integrated Health Partnerships 2.0

One of the strong points of Minnesota’s first IHP program was the flexibility it granted to participants, wherein organizations could serve as Integrated or Virtual IHPs with two options for shared savings based on the participant’s structure and capacity to coordinate care for patients and manage risk. The IHP 2.0 maintains this two-track approach, but expands the flexibility by creating a track that does not involve managing patients’ medical risk. This new track allows a broader set of organizations, such as patient centered medical homes and health homes, to participate, giving them the opportunity to develop their capabilities within two options:

  • Track 1 participants receive a risk-adjusted, population-based payment tied to several quality metrics, but there is no requirement that they manage enrollees’ total cost of care.
  • Track 2 accommodates more sophisticated providers who can manage their enrollees’ risk more fully, involving a shared savings arrangement with both upside and downside risk. Track 2 IHPs receive the population-based payment, which counts toward their total cost of care calculations for their attributed population, and share savings and risk with payers.

Of note, IHP has always incorporated behavioral health, and while Minnesota is not yet including long-term services and supports in the total cost of care — as other states have begun to consider — the new Accountable Care Partnerships model under IHP 2.0 enables more connections between health care providers and community-based providers of social services. Under this model, Track 2 IHPs can collaborate with community partners (which can be a Track 1 IHP), and be eligible for more favorable shared savings terms based on the characteristics of the partnership. Examples of areas in which IHPs can pursue community partnerships include, but are not limited to: housing, food security, social services, education, and transportation. Minnesota also realigned the quality measures in its IHP program to include more domains across patient care and to align with the Medicaid and CHIP Reauthorization Act (MACRA) and the Merit-based Incentive Payment System.

Thinking to the future, Minnesota recently released a Request for Comment (RFC) for the next iteration of its IHP program. Through the “Next Generation IHP Model,” a demonstration project in a single metropolitan area, the state is proposing an innovative financing approach that will allow high-performing organizations the opportunity to take on even more financial responsibility for their beneficiaries’ health. The proposed model involves an increasing subcapitated payment for medical management that will be adjusted based on IHPs’ quality performance, intended to provide participating organizations with more flexibility to address their beneficiaries’ needs. The proposed arrangement removes managed care organizations (MCOs) from the relationship between the state and the IHP, leaving beneficiaries to choose to participate in a Next Generation IHP or an MCO. Minnesota is currently reviewing responses to the RFC, and will incorporate stakeholders’ input in the final program design.

Colorado Accountable Care Collaborative Phase II

Colorado’s initial implementation of its Accountable Care Collaborative (ACC) established geographically exclusive Regional Care Coordination Organizations (RCCOs) responsible for coordinating the care of members in their coverage areas. Colorado’s next version of its ACC aligns its RCCOs with its managed behavioral health organizations to create one administrative entity referred to as Regional Accountable Entities (RAEs). RAEs will be responsible for both the care management and practice support responsibilities of the RCCOs as well as receiving the capitated payments for its managed behavioral health program.

ACC Phase II also reforms Colorado’s payment for behavioral health care. The program maintains the capitated payments for behavioral health care that Colorado makes to its behavioral health organizations, though the payments are now routed through the RAEs. It also allows for short-term behavioral health treatment to be delivered in primary care settings and reimbursed using fee-for-service to increase access for members with less acute needs.

The RAEs will also support providers in their participation in Colorado’s innovative Primary Care Alternative Payment Model that is designed to align with CMS’ Comprehensive Primary Care Plus and MACRA’s delivery system reforms by creating opportunities for organizations within the state to participate in the most advanced payment reforms in those initiatives. Specifically, the Alternative Payment Model will eventually offer two tracks:

  • Track 1 is a points-based system in which primary care practices will select quality measures, each of which is assigned a point value.  Achievement of points will translate to increased payments on a set of primary care codes.
  • Track 2 is still under development, but it is likely that the model will allow practices to receive some of their payments prospectively, with the remainder based on a core set of primary care codes.

Iteration Drives Innovation

With Minnesota and Colorado building on prior successes to develop new versions of their ACO programs, it brings the number of second-generation Medicaid ACO programs to four — Vermont, Oregon, Minnesota, and Colorado. These programs pay increased attention to the social determinants of their beneficiaries’ health, allow participating organizations to take on more financial risk, and align with new reforms elsewhere in the health care system. We expect other first-generation Medicaid ACO states to similarly improve their programs in the near future, and many more to develop even more innovative ways to address the quality and cost of caring for their Medicaid enrollees.

Look for an upcoming national CHCS webinar in February, made possible by the Commonwealth Fund, featuring Minnesota and Rhode Island’s Medicaid ACO approaches.

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