Accountable Care Organizations in Medicaid: Emerging Practices to Guide Program Design

Accountable care organizations (ACOs) are gaining momentum in Medicaid. As Medicare, commercial payers, and providers aggressively launch ACOs across the country, state Medicaid agencies, health plans, and providers have also been planning innovative ACO initiatives for their beneficiaries. Given Medicaid’s growing role as a health insurer, ACOs offer states an opportunity to drive broader delivery-system transformation for providers and systems serving low-income populations.

To help guide Medicaid stakeholders in developing safety-net ACOs, CHCS interviewed state Medicaid leaders, ACO stakeholders, and health plan officials in states that are pursuing ACO models, as well as key federal officials. This brief highlights emerging best practices from state ACO activities across the country and summarizes safety-net ACO programs being developed in five states. It outlines key issues for federal and state agencies, health plans, providers, and communities to consider in designing ACO programs to serve low-income beneficiaries, with a focus on:

1. Core capabilities;
2. Financial models;
3. Design issues; and
4. Fit within the existing delivery system.