An Early Taste of ACOs

Early feedback suggests that, in the recipe for ACOs, the right ingredients are all there, but the seasonings may need adjusting.
Accountable Care Organizations (ACOs) are one innovation promoted by the ACA as a way to encourage providers to work together to provide coordinated care for patients. The law envisions ACOs as virtual organizations of primary and specialty care providers that accept accountability for improving patient and population health.
States are beginning to consider the promise of ACOs and some states are drafting their own legislation to promote the formation of ACOs.

• New Jersey recently introduced legislation to establish a Medicaid ACO demonstration program. It allows flexibility in the types of ACO networks that are formed, but requires them to have an IT infrastructure, mechanisms for data sharing, and to work with health centers.
• Illinois is beginning to formulate a state approach to ACOs. Illinois’ Medicaid agency plans to set minimum standards and allow providers and systems to propose models for care coordination.  The state will seek actuarial help in setting payments for each new model.
• The Colorado Medicaid agency has been active in promoting the formation of Regional Care Coordination Organizations (RCCOs) and allowed flexibility to include public health, behavioral health, home health, social services, housing, and transportation in their formation. RCCOs are a graduated approach that protects safety net providers by allowing them to bill for their claims, but begins to move them toward performance based, shared savings payments.

The first federal ACO demonstration program being established under the ACA is the Medicare Shared Savings Program.  Additional ACO models, such as pediatric ACOs, are also included in the ACA, and the Center for Medicare and Medicaid Innovation (CMMI) recently announced “Pioneer Model” ACOs and is exploring the concept of safety net ACOs. Interestingly, some existing safety net systems already embody elements of the ACO model:

• The Camden Coalition in New Jersey is an organization of social workers, nurses, physicians, administrators, hospitals, health services organizations, and clinics. The group shares data among hospitals and primary care providers to successfully intervene with high-cost patients.
• The Cambridge Health Alliance in Massachusetts is an integrated health system that includes hospitals, a primary care network, an employed physician model, and a Medicaid managed care plan for which they take on financial risk.

ACOs are still an experiment, but they are clearly an experiment whose time has come. Is your state ready to experiment with ACOs? Share your thoughts with us at statereforum.org.