Funder: The Commonwealth Fund

Author: Rob Houston and Tricia McGinnis, Center for Health Care Strategies

February 2016 | Brief


Medicaid accountable care organizations (ACOs) are rapidly becoming the norm in states across the country. States are looking to this model to shift more accountability to providers through strategic monitoring of quality measures tied to alternative payment models, such as shared savings arrangements. Over the past four years, eight states ─ Colorado, Illinois, Maine, Minnesota, New Jersey, Oregon, Utah, and Vermont ─ have launched Medicaid ACO or ACO-like programs. Combined, these programs serve more than 2.5 million beneficiaries and have saved an estimated $167.9 million to date.

This brief distills key lessons from these Medicaid ACO pioneers through CHCS’ work in the Medicaid ACO Learning Collaborative, made possible by The Commonwealth Fund. Since 2012, CHCS has helped 13 early-adopter states to design, launch, and improve their Medicaid ACO models. Through these efforts, CHCS has learned a great deal about Medicaid ACO models, including fundamental decisions that must be made when designing a program. This brief examines the early experiences of state Medicaid ACO programs and offers considerations for additional states. It outlines three core steps to guide states in developing an ACO approach: (1) evaluate the current environment; (2) define program goals and framework; and (3) develop a structural model.

Medicaid ACOs are now a significant presence in state Medicaid programs, with additional states seeking to launch ACO models. This brief will help states in designing a tailored ACO approach that meets the unique needs of their Medicaid populations.