More states turn to ACOs to hold down Medicaid costs


Colorado was one of the first states to launch an accountable care-like model in 2011 to rein in Medicaid costs while improving quality of care. But other states are now following the Centennial State's lead. States across the country are either joining Medicaid ACO demonstration projects, in the middle of a pilot program or looking to start one, MedPage Today reported.

Oregon already employs coordinated care organizations for its Medicaid population, while Minnesota is in the middle of a three-year demo. New Jersey hopes to start its own three-year Medicaid ACO demonstration project later this year, MedPage noted. Alabama, meanwhile, has plans to start regional ACOs for its Medicaid patients in 2017.

In Illinois, five Chicago healthcare groups received preliminary approval for a new accountable care entity (ACE) to reduce Medicaid costs. Advocate Health Care, Loyola University Health System, Presence Health and Access Community Health Network, as well as a joint effort by Swedish Covenant Hospital, Norwegian American Hospital and Mercy Hospital & Medical Center, hope to launch the Medicaid ACE by July 1, FierceHealthcare previously reported.

North Carolina plans to use new and existing ACOs to serve most of the state's Medicaid population and save $1 billion over five years, AIS Health reported. The state hopes to start enrolling Medicaid beneficiaries in ACOs in July 2015.

Most states, including Colorado, are gradually rolling out their Medicaid ACO programs, and haven't yet included disabled or dual-eligible populations, according to another MedPage article.

North Carolina has plans for a similarly paced implementation. "We believe there is some savings potential with ACOs, that going on a gradual slope to increasing risk will create a partnership with providers" and do it in a "non-disruptive way," Bob Atlas, a Medicaid consultant to North Carolina's Department of Health and Human Services, told AIS Health.

Colorado's Medicaid ACO saved between $9 million and $30 million in its first year, and $44 million savings in its second year. But the state spent almost $18 million in the first year and more than $36 million in the second year to pay for regional coordinators and primary care providers, according to MedPage. But healthcare reform experts told the news service that Medicaid ACOs need at least five years of operation before they can declare them successes or failures.

For more:
- check out the MedPage articles on Medicaid ACO struggles and state actions
- here's the AIS Health article (subscription required)

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