A new analysis of the landscape around accountable care in the Medicaid world finds a mixed picture. Analysts at the Salt Lake City-based Leavitt Partners have released a new analysis, which finds that the growth of Medicaid accountable care organizations (ACOs) has been slower than that of Medicare and commercial ACOs, but which also finds that Medicaid ACOs are on average more mature than Medicare or commercial ACOs.
Writing in their just-published whitepaper, “Medicaid ACO Landscape,” Lia Winfield, Brooke Zollinger, Robert Richards, Cristal Gary, and David Muhlestein summarize their detailed findings by writing that “Our examination of Medicaid ACOs indicates that substantially fewer Medicaid ACOs exist and growth in covered lives has been slow compared to Medicare or commercial ACOs. However, there is some evidence to suggest that, although fewer in numbers, Medicaid ACOs are on average more mature than either Medicare or commercial ACOs. ACO maturity matters because it is one indication of an organization’s engagement with and commitment to accountable care. It indicates that ACOs are making the type of care delivery changes that meaningfully impact outcomes and costs.”
Nationwide, the researchers find that of the 1,013 ACOs that existed at the end of 2018, only 76 were Medicaid ACOs, compared to 647 Medicare ACOs and 477 commercial ACOs. What’s more, they write, “At the end of 2018, Medicaid ACOs covered an estimated 3.7 million lives while Medicare and commercial ACOs together covered 30.2 million lives. Covered lives is important for gaining critical mass for change in care delivery, which is an important success factor for ACOs,” they note. “While Medicaid ACOs cover fewer lives than Medicare and commercial ACOs, those lives tend to be more concentrated across fewer contracts, giving Medicaid ACOs greater scale in the markets where they operate.”
The authors state that “The discrepancy in number of lives covered by Medicaid ACO contracts and their Medicare and commercial counterparts is important to understand in the context of the joint federal and state nature of Medicaid. Because Medicaid is a jointly-funded program administered by the states, the Centers for Medicare & Medicaid Services cannot implement a large Medicaid ACO program equivalent to the Medicare Shared Savings Program or compel states to adopt such a model. Some states, such as Oregon and most recently Massachusetts, have shown considerable enthusiasm and initiative for Medicaid ACOs while many have not. The joint funding of Medicaid introduces other challenges as well for Medicaid ACOs, including how to allocate the percentage of program savings that should go to the state versus federal government.”
Further, they write, “One of the reasons an ACO’s number of contracts matters is because it is an indication of the ACO’s maturity.9 A high number of active contracts signals an ACO’s desire and readiness to assume responsibility for a patient population. If Medicaid ACOs with more than one contract across several payers commit more of their revenue through value-based contracts than through fee-for-service, it may be an indication that those ACOs are more committed to value and are making the meaningful care delivery changes that are required to successfully improve outcomes and lower costs. This measure of maturity also distinguishes between ACOs “in name only” and those that tie a meaningful amount of their revenue to value-based contracts. Figure 7 shows the average maturity score for active payment arrangements.”
Among the challenges facing ACO leaders in the Medicaid arena is the fact that “Medicaid beneficiaries often have greater need for behavioral health support and are more like to struggle with social determinants of health (SDOH) concerns, such as income, housing, food, and transportation insecurities.” They are also much more like to “churn”—to cycle on and off Medicaid.
In the end, the researchers write that “While significant growth in Medicaid ACOs and covered lives has been slow, a growing collection of research demonstrates promising results across different states’ ACO programs. For example, one study found that Oregon’s establishment of its CCO Medicaid ACO program in 2012 was associated with a seven percent relative reduction in expenditures across a number of services, which the authors primarily attribute to a reduction in inpatient utilization.” They see the positive experiences of Oregon, Colorado, and several other states as serving as encouragement for other states considering a Medicaid ACO program.
