States turn to ACOs to cut Medicaid costs

A variety of states are considering accountable care organizations to control costs in their Medicaid programs, according to a new report from the Kaiser Family Foundation.

The report noted that the shift to ACOs is spurred, in part, not only by the Patient Protection and Affordable Care Act but also the current economic and budget climate.

"Interest in Medicaid ACOs appears to be fueled partly by a belief that ACOs have potential to both deliver higher quality care and to improve efficiency and value," the report states. "Most states applying the ACO concept in Medicaid have focused on strategies designed to increase provider engagement and accountability for care and to realign financial incentives over time."

The report also noted that ACOs may be used to control costs for those enrolled in both Medicare and Medicaid.

Utah, Colorado, Minnesota and Oregon are developing or have formed ACOs to handle their Medicaid enrollees, according to the report. In Utah, the entire program is shifting back from no-risk provider contracts to an ACO model. However, only Colorado has a partially operative ACO at this point, noted AHA News Now.

To learn more:
- read the Kaiser Family Foundation report (.pdf)
- here's the AHA News Now brief

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