A subset of state Medicaid agencies leading the charge in developing accountable care organizations (ACOs) are now encountering a conundrum that they knew was coming: how to align their vision for accountability across all Medicaid-financed services with the realities of the long-term services and supports (LTSS) delivery system. That fragmented system is going through its own parallel changes in moving from fee-for-service to managed care and, from being entirely separate from Medicare to being increasingly aligned with it for those dually eligible for Medicare and Medicaid.

Incorporating LTSS into Medicaid ACO models will, without question, be challenging. In addition to federal and state policy alignment barriers, there will be issues surrounding the role of health plans. Further, coordination at the provider level will require bridging fundamental differences in culture, payment practices, data and system capabilities, quality measurement, and care management approaches.

The conundrum, of course, is that if Medicaid ACOs are by design intended to integrate care on the ground for Medicaid beneficiaries, particularly those that incur high costs, how can these ACOs not incorporate LTSS — especially community-based, non-institutional care? Fortunately, leading-edge states like Massachusetts and Maryland, though not yet at the point of implementing such models of integration, are beginning to pave conceptual pathways forward. In our work with these and other states through The Commonwealth Fund’s Medicaid ACO Learning Collaborative and related work with states integrating LTSS for beneficiaries who are dually eligible for Medicare and Medicaid, we have noted five program elements for states, ACOs, and other stakeholders to consider when designing ACO programs that promote integration of LTSS:

Considerations for Incorporating LTSS Providers into Medicaid ACOs

Although each state’s Medicaid program is different, these are universal issues for states to address as they develop their approaches. Maryland, for example, is exploring how to build an ACO program for dually eligible beneficiaries that is synchronized with its all-payer hospital global budget initiative run by the Health Services Cost Review Commission. Massachusetts intends to include LTSS for non-dually eligible populations in the ACO total cost of care by the second year of its soon-to-be launched ACO program. Other states are beginning to move in this direction: North Carolina recently articulated its intention to incorporate LTSS into its evolving ACO model and Rhode Island is in the initial exploration stage.

Stay tuned. In a federal environment committed to alternative payment models that shift responsibility for care and costs to the provider level, ACOs are playing a key role in Medicare and — as we have seen — in a number of state Medicaid programs. One way or another, LTSS will become a more and more essential ingredient in getting this piece of delivery system reform right.

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