Policy Recommendations for States to Promote Accountable Care in Medicaid Programs

Authors: Deborah Bachrach | William S. Bernstein | Anne O'Hagen Karl

Federal and state health reform efforts present compelling opportunities to advance new payment and delivery system models to improve the quality of healthcare services and rein in costs. An emerging challenge for policymakers is to create alignment among these initiatives so that proliferation of payment and delivery system models does not lead to conflicting financial incentives and burdensome reporting requirements for providers.

A new report, "High-Performance Health Care for Vulnerable Populations: A Policy Framework for Promoting Accountable Care in Medicaid," prepared for The Commonwealth Fund by Deborah Bachrach, William Bernstein and Anne Karl of Manatt, notes that Medicaid can play a significant role in harmonizing the various delivery system reform initiatives and driving change that fosters greater accountability and improved performance across the health system and across payers. The report focuses on the Medicare Shared Savings Program (MSSP) as an example of how Medicaid might build on reform programs in Medicare, as the Centers for Medicare and Medicaid Services (CMS) has explicitly recognized that the ACO infrastructure can be leveraged to care for Medicaid populations.

ACOs are most likely to succeed if they deploy care management strategies across all patient populations. This report offers a policy framework for states to establish ACOs in their Medicaid programs by building on the MSSP model and harmonizing Medicaid's policies across Medicaid, both fee-for-service and managed care models as well as with Medicare. Some of the specific recommendations in the report include:

Getting the strategy right. States should develop a core strategy for achieving their goals of containing costs and improving quality in Medicaid and decide whether supporting ACO formation is central to this strategy.

Translating strategy into action. In markets dominated by traditional fee-for-service payment structure, states may want to model their ACO programs on the MSSP. However, for the large number of states with significant Medicaid managed care programs, relying on the MSSP model does not go far enough. These states will want to consider strategies to integrate provider accountability (through quality metrics and performance-based payment methodologies) into their managed care program thereby aligning Medicaid managed care and fee-for-service policies.

ACO certification. States should adopt a streamlined certification procedure that builds on the MSSP certification process and accounts for the needs of the Medicaid program, which provides care to a vulnerable patient population. States may facilitate certification of Medicaid ACOs by several means, including: deeming ACOs participating in the MSSP certified for the purposes of Medicaid ACO participation; creating a supplemental certification process; or creating a parallel state certification process for providers not applying for certification as a Medicare ACO. States may also consider working with an outside accreditation body to develop certification criteria that bridge the requirements of both Medicare and Medicaid.

ACO governance and ownership. States should align any ACO governance and ownership requirements with those set forth in the MSSP in order to avoid imposing conflicting standards on providers participating in both programs.

Assignment to an ACO. For Medicaid fee-for-service patients, it may make sense to follow MSSP's lead and assign patients retrospectively, based on where they receive a majority of their primary care in each year. However, states may want to consider prospectively assigning individuals with complex needs to ACOs in order to reach out to and closely manage these individuals.

To access the full list of policy recommendations described within the report, please visit The Commonwealth Fund Web site.

This report is part of Manatt Health Solutions' library of thought leadership relating to the opportunities and challenges that exist for states in implementing federal healthcare reform and addressing issues relating to cost, quality and access to care. The team recently authored "Toward a High Performance Health Care System for Vulnerable Populations: Funding for Safety Net Hospitals" (March 2012); "Accountable Care Organizations in California: Programmatic and Legal Considerations" (July 2011); and "Considerations for the Development of Accountable Care Organizations in New York State" (June 2011).