Why insurers should be watching New Jersey ACOs

New Jersey has certified three of six applicants for its Medicaid Accountable Care Organization (ACO) Demonstration Project. And insurers could benefit by following the three community coalitions--the Camden Coalition of Healthcare Providers, the Healthy Greater Newark ACO and the Trenton Health Team--during the three-year demonstration project, according to a blog post in the journal Health Affairs.

First, New Jersey's community-based ACO approach offers an "exciting new model for providing care to Medicaid recipients," Joan Randall, chief operating officer of The Nicholson Foundation, wrote in the blog.

That's because these ACOs must service a specific geographic region that they define and must include at least 5,000 Medicaid members. The ACOs also must include all hospitals within the specified area--even if the hospitals are competitors--plus 75 percent of Medicaid primary care providers and four or more qualified behavioral health providers.

Additionally, New Jersey's Medicaid demonstration project could potentially align quality objectives with payment incentives, Randall said. That's because they must have a strategy to enhance outcomes, which must incorporate quality and efficiency of healthcare, patient safety and patient satisfaction. If the ACOs can meet these targets and lower costs, they can keep a share of any Medicaid savings achieved.

And now that the Centers for Medicare & Medicaid Services' updated the Medicaid managed care organization regulations to require that Medicaid insurers "support state efforts to deliver higher quality care in a cost-effective way," as FierceHealthPayer has reported, these New Jersey ACOs can help Medicaid managed care insurers cover higher quality in a more cost-effective way by keeping the state's most vulnerable consumers out of the hospital. 

To learn more:
- read the Health Affairs blog post


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