Medicaid ACOs are risky testing ground

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Medicaid population is an unpredictable testing ground for accountable care organizations (ACO), despite Medicaid ACO pilots taking hold in some states, including New Jersey, Oklahoma and Utah, American Medical News reported.

States that already have significant experience with managing care like Arizona, New York, Oregon and Tennessee are the likely candidates to experiment with Medicaid ACOs, Erik Johnson, a senior vice president at Washington-based consulting firm Avalere Health, told amednews.

However, because of the risk associated with this resource-intensive population--the chronically ill and low-income patients--Medicaid ACOs could disrupt the whole concept of ACOs, Johnson said.

Similarly, a Kaiser report in May concluded that it may be difficult to know where managed care ends and where ACOs begin.

"States with nascent Medicaid ACO initiatives appear to be aware of, and responding to, the operational issues and pitfalls associated with past managed care strategies," the Kaiser report states. "These states have emphasized the role of providers, established performance metrics, and/or focused on closer alignment of financial incentives with policy goals. At the same time, state officials have noted that the new accountable care approach brings its own technical challenges, such as methods for attributing patients to ACOs, allocation of shared savings and development of appropriate risk-adjustment methodologies."

Oregon Gov. John Kitzhaber, M.D., pointed out how new the Medicaid ACO concept is. Although traditionally rooted in the commercial space or with Medicare Shared Savings, Medicaid ACOs still are relatively new.

"We're creating something that doesn't currently exist," he said about coordinated care for the state's Medicaid population. The first groups will start in September.

In terms of how they'll cope with it, Kaiser noted that states have varying resource levels to deal with the challenges.

For more information:
- here's the amednews article
- check out the Kaiser report (.pdf)

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