A Rising Trend in Integrated Care Delivery: Accountable Care Organizations

by Brendan Flinn on August 2, 2012

The growth of Medicaid and its emergence as a universal insurance program for low-income Americans has put pressure on state Medicaid systems to keep costs down while maintaining high quality care. To accomplish both of these objectives, states are exploring new and innovative models of care and will expect accountability from Medicaid providers on both cost and clinical efficiency. This, combined with increasing demand for integrated care, has given rise to the concept of accountable care organizations (ACOs) being used as a delivery system in Medicaid.

ACOs are organizations in which a network of providers, ranging from individual practitioners to hospitals, that agree to deliver care together and assume responsibility for both quality care and cost control.  Under the ACA, Medicare has been moving towards the ACO model and many other payers are expressing interest in the concept, including private insurers and Medicaid.

To assist Medicaid-focused providers in understanding and designing ACOs, the Center for Health Care Strategies published “Accountable Care Organizations in Medicaid: Emerging Practices to Guide Program Design,” a policy brief which outlines four key things providers can do now to prepare their organization for a Medicaid ACO:

1)      Get involved with a diverse network of providers: ACOs need to offer a variety of services across the spectrum of physical health, behavioral health and social services. Build relationships with an existing network of providers, or start a network of your own. Within this network, develop cross-functional, patient-centered care teams that can manage and develop plans for high-need, high cost patients and a health information exchange system that can be used and analyzed across the network. Strong leadership on all levels is also needed to develop and carry out the ACOs mission. With these three core capabilities, Medicaid-focused ACOs can flourish and deliver cost-effective, high-quality health care.

2)      Develop partnerships with social service and community organizations: A common theme found among providers is that low-income populations often have unmet social needs, such as housing, employment and transportation that can lead to health problems. By collaborating with community and social service stakeholders, ACOs can connect patients to both integrated health care and the social services they need.

3)      Empower primary care providers: The idea that putting decision-making power at the point of care, primary care providers themselves, can improve quality and reduce costs is critical in the ACO model. This can be done by including PCPs in the ACO design process, placing PCPs in leadership roles in the ACO and giving practices the autonomy to invest savings at will. Empowering on-the-ground teams and providers will instill a sense of ownership and engagement in the ACO, which can dramatically improve care.

4)      Advocate: Your state Medicaid agency has the authority provide leadership in ACO development. State agencies can also use their powers to encourage and guide ACO growth, incentivize innovation and lead efforts to integrate care. Providers can get involved in Medicaid ACO development by reaching out to their state agencies to speak up for our field’s priorities.

There are a number of ways by which ACOs can be organized, financed and carried out. Already, at least five states have begun implementing ACO models in their Medicaid systems in advance of the 2014 expansion. The Commonwealth Fund report notes that while each of these states are using the same concept, they employ different means of implementing it, showing that ACOs are flexible to the varied needs and landscapes of state Medicaid systems.

As the ACO model continues to grow as a means of health care delivery, it is important that providers understand what the ACO model does, and how they can best prepare their organizations to participate in an ACO network.

For more information, see:

Brendan Flinn is a senior political science major at the State University of New York at Albany and a public policy intern at the National Council for Community Behavioral Healthcare.

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