Spending and Utilization Indicators in the New Jersey Medicaid ACO Demonstration Project

DeLia D, Kumar R, Nova J, Lloyd K, Glodin D
Publication Year: 2018
Population Focus: Medicaid beneficiaries
Intervention Type: Service redesign
Type of Literature: Grey

This report provides a first assessment of spending and utilization indicators related to the New Jersey Medicaid Accountable Care Organization Demonstration Project. It documents quarterly trends in total cost of care, emergency department visits, total inpatient admissions, preventable admissions, readmissions, and post-discharge follow up visits during the pre-Demonstration period and the first year of the Demonstration. As descried below and in other reports, Demonstration Year 1 was predominantly a transitional year, as the ACOs were just beginning to receive data feeds from the state and were contending with an uncertain funding landscape. Thus, the information in this report reflects mostly baseline conditions that the ACOs did not expect to alter in a significant way in Year 1. Moreover, this report is part of a sequence of evaluation documents and should not be viewed in isolation from the rest of the sequence.

Insights Results


  • Inability of existing data systems to clearly identify primary care providers in accountable care organization (ACO) service regions affected ACOs’ ability to meet certification requirements
  • The original legislation did not include ACO startup funding, which affected ACOs’ early financing and care planning strategies
  • The voluntary nature of managed care organization (MCO) participation placed the burden on ACOs to actively
    encourage and negotiate such participation
    Financial/quality outcomes
  • Throughout the study period, total costs of care was higher in the propensity-weighted comparison group, though it moved closer to the ACO groups before Demonstration Year 1 (beginning in 2015-Q3)
  • Throughout the study period, preventable admissions were higher in the ACO regions. In several groups there was a general reduction in preventable admissions in 2013, which coincides with the initial rollout of the DSRIP program, which focused on this measure
  • Among Medicaid enrollees covered by Horizon Total Cost of Care (TCOC) were similar within and outside of the ACO throughout the study period (Figure 12). ED visits and preventable hospitalizations were consistently higher in Camden than among other Medicaid Horizon members (Figures 13 & 14). In contrast, 30-day readmissions trended downward in Camden while remaining flat among other Horizon Medicaid members (Figure 15)
  • Although baseline trends were broadly similar across the study groups examined, the ACO communities exhibited some differences in the overall levels of some indicators, most notably TCOC and ED visit rates, throughout the entire observation period (2012-Q1 through 2016-Q2)
  • Among Camden’s United members, there was an apparent decrease in total inpatient admissions and preventable admissions around the time of the execution of the shared savings arrangement (which occurred before the start of the statewide Demonstration)
  • Among Camden’s Horizon members, there was a shallow decline in readmissions, which took place throughout the study period and not coincident with the timing of the shared savings arrangement