Medicaid Accountable Care Organizations in Four States: Implementation and Early Impacts
As state Medicaid programs consider alternative payment models (APMs), many are choosing accountable care organizations (ACOs) as a way to improve health outcomes, coordinate care, and reduce expenditures. Four states (Maine, Massachusetts, Minnesota, and Vermont) leveraged State Innovation Model awards to create or expand Medicaid ACOs.
We used a mixed-methods design to assess achievements and challenges with ACO implementation and the impact of Medicaid ACOs on healthcare utilization, quality, and expenditures in three states. We integrated findings from key informant interviews, focus groups, document review, and difference-in-difference analyses using data from Medicaid claims and an all-payer claims database.
States built their Medicaid ACOs on existing healthcare reforms and infrastructure. Facilitators of implementation included allowing flexibility in design and implementation, targeting technical assistance, and making clinical, cost, and use data readily available to providers. Barriers included provider concerns about their ability to influence patient behavior, sustainability of provider practice transformation efforts when shared savings are reinvested into the health system and not shared with participating clinicians, and limited integration between healthcare and social service providers. Medicaid ACOs were associated with some improvements in use, quality, and expenditures, including statistically significant reductions in emergency department visits. Only Vermont’s ACO demonstrated slower growth in total Medicaid expenditures.
Four states demonstrated that adoption of ACOs for Medicaid beneficiaries was both possible and, for three states, associated with some improvements in care. States revised these models over time to address stakeholder concerns, increase provider participation, and enable some providers to accept financial risk for Medicaid patients. Lessons learned from these early efforts can inform the design and implementation of APMs in other Medicaid programs.
Approach to care