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In 2011, Utah’s governor signed into law SB 180, legislation requiring the Department of Health to “develop a proposal to amend the state plan for the Medicaid program in a way that maximizes replacement of the fee-for-service delivery model with one or more risk-based delivery models.” The law called for identifying mechanisms to pay for episodes of illness and reward providers that make the most positive contribution to a Medicaid beneficiary’s health status.
 
The law also called for the Department of Health to submit a waiver to the Centers for Medicare & Medicaid Services to support implementation of the proposal; the resulting waiver request is currently inactive.
 
In compliance with SB 180, the state originally included its proposal to convert existing managed care contracts into ACO contracts in the Payment & Service Delivery Reform Proposal for an 1115 Demonstration waiver it submitted to CMS in June 2011.When CMS denied this waiver request but expressed support for the ACO model, the state sought to amend its existing 1915(b) managed care waiver to incorporate the ACO contracting approach. Utah Medicaid plans to build upon and replace its existing managed care framework by replacing existing managed care contracts with what it calls Accountable Care Organization contracts. These contracts would restructure the fee-for-service payment relationships that exist between managed care companies and provider organizations.
 
The Utah Department of Health is currently in contract negotiations with health plans that will participate in its ACO contracting model starting in January 2013.
 
To learn more about Utah’s medical homes initiatives, visit the Utah page of NASHP’s medical homes map.
 
Last updated November 2013.

 

Project Scope
Scope of Services: Utah’s Accountable Care Organization (ACO) contracts would include inpatient hospital, outpatient hospital, physician services and other ancillary services, as well as pharmacy benefits. ACOs would not be responsible for mental health services, substance abuse treatment services, nursing facilities, or transportation.
 
Eligible Patient Population: All Medicaid beneficiaries are eligible for the ACOs, except for those in a nursing or inpatient facility.
 
Enrollment: Reflecting the program’s roots in managed care, Medicaid enrollees will choose an ACO contractor who will be responsible for the costs and quality of the care provided to them. Utah currently has mandatory enrollment in managed care plans in its four most populous counties, and the state proposes to implement the ACO contract model in those same four counties. Those who do not choose will be assigned and attributed to an ACO.
Authority
Utah is pursuing Accountable Care Organizations (ACOs) in Medicaid under the mandate to introduce new payment methodologies into Medicaid established by SB 180 in 2011.
 
The state originally included its proposal to convert existing managed care contracts into ACO contracts in the Payment & Service Delivery Reform Proposal for an 1115 Demonstration waiver it submitted to CMS in June 2011; this waiver was submitted in accordance with a statutory requirement included in SB 180. While CMS denied this waiver request, it expressed support for the ACO model proposed by the state. The state sought to amend its existing 1915(b) managed care waiver to incorporate the ACO contracting approach.
Governance

Oversight of ACO contracts would remain the responsibility of the Utah Department of Health, as it is under existing Medicaid managed managed care contracts.

Criteria for Participation

Utah proposes to use Accountable Care Organization (ACO) criteria developed by the National Committee for Quality Assurance (NCQA). Organizations that plan to contract with Utah Medicaid as ACOs will be required to demonstrate that they are seeking NCQA accreditation.

Payment
Accountable Care Organizations (ACOs) would receive monthly, risk-adjusted capitated payments based on enrollment. The payments will consist of actuarially certified rates based on major categories of Medicaid eligibility and the severity of illness prevalent in the enrolled population. They would be responsible for delivering necessary and appropriate care, as well as demonstrating that quality of care and access to care are not suffering.
 
Organizations contracting as ACOs will be given flexibility to pursue innovative payment mechanisms among their networks of providers. According to the state’s proposal, “Rather than reimbursing providers based on the units of service delivered, the ACO would make payments for delivering the necessary care to a group of Medicaid enrollees for a specified period of time.”
 
The state distinguishes this arrangement from traditional managed care contracts by noting:
(1) that the ACO contract payments eliminate the incentives to provide excess care and
(2) the contracts will be maintained only if the ACO meets established quality and access criteria.
Support for Infrastructure

Information on supports offered by the state to support the infrastructure for ACOs is forthcoming as the ACO contracts currently being negotiated become publicly available.

Measurement and Evaluation

The Department of Health will monitor ACOs using Healthcare Effectiveness Data and Information Set (HEDIS) quality measurement data and has also indicated interest in developing ACO-specific metrics in collaboration with providers and advocates.

 

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