States Test Medicaid ACOs to Cut Costs

Looking to control Medicaid costs, several states are launching accountable care initiatives that mirror experiments underway with Medicare and private insurers but vary significantly in their approaches.

Looking to control Medicaid costs, several states are launching accountable care initiatives that mirror experiments underway with Medicare and private insurers but vary significantly in their approaches.

The Medicaid programs are contracting with networks of doctors, clinics and hospitals that agree to provide more integrated care of beneficiaries while reining in costs. In most versions, participating providers are eligible to receive shared-savings payments if the ACO meets quality benchmarks.

Despite generally low Medicaid reimbursement rates—60% of Medicare rates on average—interest among hospitals and providers is high. That's not only because of the potential to earn bonus payments, but also because hospitals hope their efforts will reduce unnecessary ER visits. Various incarnations of Medicaid ACO programs are underway or are about to launch in Alabama, Colorado, Maine, Massachusetts, Minnesota, Oregon, Texas, Utah and Vermont.

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Source: Modern Healthcare