Minnesota – ACO Map

Minnesota launched a Health Care Delivery Systems Demonstration within its Medicaid program in 2011. The demonstration has several goals, including: encouraging providers to innovate to deliver higher-value care to Medicaid enrollees; supporting robust primary care and care coordination; testing payment models that increase provider accountability; implementing projects in different parts of the state; allowing both larger and smaller provider groups to participate; and creating alignment with similar initiatives across payers.
In 2013, Minnesota received a State Innovation Model grant from the Center for Medicare and Medicaid Innovation to expand upon the Health Care Delivery Systems Demonstration. As part of this work, the state will support Accountable Communities for Health that integrate medical care, mental health and chemical dependency, community health, public health, social services, schools and long-term supports and services. This work is anticipated to unfold in three phases:
  1. Phase One (January – June 2013) will consist of implementation of nine accountable care organization (ACO) contracts under the Health Care Delivery Systems Demonstration in alignment with other payers in the state.
  2. Phase Two (July 2013 – June 2014) will allow for a second round of ACO contracts to be awarded, expanding the number of Medicaid enrollees and other populations served. ACOs will also receive resources and infrastructure support for measurement, quality improvement, data exchange, and practice transformation.
  3. Phase Three (July 2014 – June 2016) will see continued testing of and infrastructure support for ACOs. Three existing multidisciplinary Community Care Teams will be expanded to fifteen “Accountable Communities for Health,” bringing together ACO providers and organizations representing a range of each community’s population and service needs.
To learn more about about Minnesota’s medical homes initiatives, visit the Minnesota page of NASHP’s medical homes map.
Last updated November 2013.
Project Scope
Eligible patient population: Most Medicaid enrollees in the state are eligible to participate in the demonstration if they are attributed to a participating provider. Exceptions are noted in the Request for Proposals (RFP) released by the Department of Human Services (DHS) and include blind or disabled Medicaid beneficiaries who are dually eligible for Medicare and beneficiaries receiving Medicaid benefits on a medical spend down basis.
Provider population: Providers who apply to participate in the demonstration must be enrolled Medicaid providers meeting criteria established in the RFP. Participating health care delivery systems (HCDSs) need not compel all of their providers to participate, particularly when the HCDS uses different care models in different locations around the state; the scope of the demonstration may be limited to sub-segments of clinics and systems that have specific models of care in some locations but not others.
Attribution: The RFP for the demonstration specifies that a preliminary population will be determined for each HCDS at the beginning of the performance period. At the end of the performance period, the attribution population will be re-calculated for accountability purposes. Attribution will be determined using a hierarchical process (based first on participant enrollment in a certified Health Care Home) described in the RFP. Answers from the DHS to questions submitted on the RFP establish that a minimum threshold of enrollment will be set for inclusion in the attribution model and there will not be geographic limits on enrollee attribution.
Scope of Services: Health care delivery systems (HCDSs) participating in the demonstration will be responsible for the total cost of care of their Medicaid patient populations participating in the demonstration. A DHS memorandum on definitions of total cost of care identified criteria for the inclusion of services in the definition of total cost of care:
  • Services provided by the primary care entities and other providers within the HCDS demonstration;
  • Services ordered by the primary care entities and other providers within the HCDS demonstration (e.g. laboratory services, consultations, therapies, hospitalizations , etc.);
  • Services whose utilization would reasonably and significantly be affected by the coordination of care envisioned by this demonstration; and
  • Services that may have otherwise been included by the criteria listed above, but whose provision would provide value primarily beyond of the calculation of total cost of care have been excluded (e.g. respite care and long term acute hospital).
Specific procedure/revenue codes for included services were provided in a table released by the DHS.
Under the Minnesota Accountable Health Model, the state’s federally funded State Innovation Model to expand upon the HCDS Demonstration, the state will expand the scope of services to include mental health and long-term supports and services.
In 2010, the Minnesota Legislature passed a bill (Minnesota Statutes § 256B.0755) requiring that the Commissioner of Human Services “develop and authorize a demonstration project to test alternative and innovative health care delivery systems, including accountable care organizations that provide services to a specified patient population for an agreed-upon total cost of care or risk/gain sharing payment arrangement.”
The Department of Human Services released a Request for Proposals from Health Care Delivery Systems (HCDSs) in the state in September 2011.
Minnesota received federal approval to implement the demonstration’s payment reforms under its Medicaid state plan in August 2012. The state also received a State Innovation Model grant from the Center for Medicare and Medicaid Innovation to support expansion of its accountable care work in early 2013.

As explained in a memorandum on flexibility under the Demonstration from the Department of Human Services, providers participating in the Health Care Delivery Systems demonstration are not required to form new legal or financial entities.
Minnesota’s accountable care work is overseen by the Department of Human Services in collaboration with the Department of Health. A statewide  Model Testing community advisory committee and a Multi-Payer Alignment Group will be established to advise the departments under the state’s State Innovation Model grant work.

Criteria for Participation
Criteria for providers wishing to participate in the demonstration as a health care delivery system (HCDS) were specified in the RFP released by the Department of Human Services. These criteria require participating providers to:
  • Deliver the full scope of primary care services and either deliver specialty services or demonstrate the ability to coordinate with specialty providers and hospitals
  • Be enrolled as Medicaid providers
  • Demonstrate how the HCDS will affect the total cost of care of its Medicaid participants
  • Incorporate in the care delivery model formal and informal partnerships with community organizations, social service agencies, counties, etc.
  • Engage patients and families as partners in the care they receive
A participating HCDS must have a minimum assigned Medicaid population of 1,000 members.
The Health Care Delivery Systems (HCDS) demonstration will use two payment models. Both models will set a risk-adjusted total cost of care target for participating HCDSs that is calculated using risk-adjusted fee-for-service or encounter claims. Participating providers continue to receive fee-for-service or managed care contracted payments, but each HCDS’s performance for all Medicaid enrollees attributed to it for the performance period will be compared to the total cost of care target. Savings will be shared between the HCDS and the state via a reconciliation payment that is disbursed annually, contingent upon performance on quality and patient experience indicators.
One payment model, the Virtual HCDS, is aimed at provider organizations including primary care providers and/or multi-specialty providers groups that are not formally integrated with a hospital or integrated system. This approach uses a shared savings model in which the difference between annual expected and actual realized total cost of care is distributed if savings are achieved.
The second payment model, the Integrated HCDS, applies to provider organizations that are integrated delivery systems providing a broad spectrum of outpatient and inpatient care as a common financial and organizational entity (serving 2,000 attributed Medicaid participants or more). This uses a shared risk model that builds toward two-way risk sharing over time.
In the Integrated HCDS model, gains above a minimum 2 percent performance threshold are shared equally between the state and the HCDS in Year 1. In Year 2 the HCDS assumes asymmetric downside risk (with a minimum 2:1 ratio of gain-sharing thresholds to loss-sharing thresholds) and in Year 3 the HCDS assumes symmetric risk-sharing thresholds.
As described in a DHS memorandum on catastrophic claim cap levels, the amount of a HCDS’ liability for catastrophic cases is limited by caps to the defined total cost of care that a provider organization can be accountable for. These caps are:
  • Small Population (1,000–2,000 attributed participants) – $50,000 maximum claims per participant (Virtual model only)
  • Medium Population (2,000-5,000 attributed participants) –$200,000 maximum claims per participant
  • Large Population (5,000+ attributed participants) – $500,000 maximum claims per participant
Support for Infrastructure
Data feedback to providers: The Department of Human Services will make available to participating providers a variety of enrollee data to support care management. The enrollment and complexity indicators the DHS will report on are detailed in a memorandum from the department and include elements like:
  • Chronic condition counts;
  • Condition indicators;
  • Frailty flags; and
  • Mental illness flags.
Community Care Teams. Under the state’s State Innovation Model grant, three existing multidisciplinary, locally-based Community Care Teams will be expanded to support fifteen Accountable Communities for Health. They will leverage community partnerships to focus on including non-health care providers in the state’s accountable care organizations, integrating care, and building on the state’s patient-centered medical Health Care Home model.
Measurement and Evaluation
The Department of Human Services identified a “core set” of quality measures that Health Care Delivery Systems demonstration providers are required to report:
Physician measures
  1. Optimal diabetes care composite (updated to 2011 specifications)
  2. Optimal vascular care composite (updated to 2011 specifications)
  3. Depression remission at six months
  4. Optimal asthma care
  5. Colorectal cancer screening
  6. Patient experience (when implemented in 2012)
Hospital Measures
  1. Heart failure  
  2. Pneumonia
  3. Home management plan for care for asthma
  4. Patient experience (when implemented in 2012)
The state’s goal is to align HCDS reporting with existing quality measures; specifications for the HCDS core set can be found in the Minnesota Statewide Quality Reporting and Measurement System requirements.
The Department of Human Services clarified in its memorandum on flexibility under the Demonstration that participating providers have flexibility in proposing additional quality measures—beyond the core set—that are specific to the population they serve.
Under its State Innovation Model grant to expand the HCDS demonstration, Minnesota has pledged to “provide intensive investments in electronic health record/HIT adoption, secure information exchange, data analytics, practice facilitation, development of risk adjustment methodologies, and quality improvement to remove barriers to integration of care across settings for complex, high-cost patients.”