Many federal and state policymakers are realizing that effective change and cost control may require going beyond current managed care models. The more advanced collaboration and integration efforts attempt to change compensation and payment so that (in contrast to fee-for-service payment) providers are incentivized to assume more responsibility for the health and health outcomes of patients, obtain greater value in the health care they provide, monitor quality indicators, emphasize primary and preventive care, and engage in greater coordination of care with specialists. Consequently, many recent innovations have emphasized patient-centered medical homes (PCMH) that focus on team-based care centered on primary care physicians who provide both care management and care coordination with specialists (Takach 2011; KFF 2011). PCMH initiatives for the Medicaid program exist in 38 states, although they vary considerably in terms of the regions covered, types of beneficiaries (for example, dual eligible) and whether they are part of multipayer efforts that include private insurance. Eight states participate in the CMS Multi-Payer Advanced Primary Care Practice demonstration, whereas others participate in the Comprehensive Primary Care Initiative (CPCI), another CMS multipayer program based on a comprehensive program care model. The ACA also authorized the establishment of “health homes,” which are similar to PCMH but are geared specifically to beneficiaries with chronic conditions.
The newest and most far-reaching of the delivery system and payment reforms include ACOs, shared savings, and bundled payment arrangements. Although the details of these models differ, they are similar in that a group of providers (including both hospitals and community providers) are responsible for the care of a pool of patients and share in the financial risk and potential cost savings generated by improved quality and efficiency of care (indicated by defined quality metrics). Provisions in the ACA authorized ACOs for Medicare and also established a new Center for Medicare & Medicaid Innovation within CMS to test new payment and delivery models.
Although focused initially on Medicare, ACOs and similar types of payment and delivery reforms have attracted considerable interest in the private sector and among state Medicaid programs. Among states pursuing Medicaid ACOs, significant variation exists across these models in terms of implementation status, organization, geographic coverage, target population, scope of services, provider composition, and payment methods. Perhaps the most comprehensive is the Oregon Integrated and Coordinated Health Care Delivery System, which establishes coordinated care organizations statewide that will serve virtually all Oregon Health Plan enrollees—including dual eligibles—and coordinate the provision of a broad range of services, including dental, behavioral, and mental health care. Other programs are statewide in scope (Minnesota, Colorado, and North Carolina) but do not necessarily require beneficiaries to enroll in a participating ACO organization, or exclude groups of beneficiaries, such as dual eligibles. Other programs are limited geographically to cities, counties, or other local areas. Most are restricted to Medicaid beneficiaries, although several are part of multipayer initiatives (for example, Arkansas; Grand Junction, Colorado; and Vermont).
The relationships of new payment arrangements with existing managed care organizations and PCMH initiatives also vary (Gold et al. 2012). Managed care organizations act as ACOs in some states (for example, Utah); other states bypass managed care organizations and contract directly with provider-led ACOs. Some state ACO programs “evolved” from PCMH programs (for example, in North Carolina), building on the provider networks, IT infrastructure, and use of quality metrics that had already been established. Some members of the TEP convened for this project assert that ACOs will be most relevant for safety net hospitals in states that still have significant fee-for-service payment, but less so in states that already have a long-standing infrastructure of Medicaid managed care (HHS/ASPE 2013). The reason is that with risk-based payment already in place in states with extensive managed care, there is less potential to extract savings and therefore little to be gained by an ACO-like shared-savings model.