Missouri legislators explore managed care options

Experts: ACOs could improve health care quality, efficiencies

Accountable Care Organizations (ACO) that have been successful with Medicare could be viable options for Missouri’s Medicaid system, state health experts say.

According to the American Hospital Association, ACOs are partnerships between hospitals and physicians to coordinate and deliver efficient care. Providers show accountability for improving health care quality and reducing costs.

“I think there’s definitely room for an ACO-type model, whether that be similar to what we’re seeing happening in Medicare or something like a medical home, which has been talked about for probably a decade or more,” said Dave Dillon, vice president of media relations for the Missouri Hospital Association.

The Missouri House of Representatives’ Interim Committee on Medicaid Transformation will discuss cost sharing and managed care, such as ACOs, at a series of hearings this week.

History of the ACO

President Barack Obama’s Patient Protection and Affordable Care Act of 2010 set up ACO demonstration programs within Medicare. Services and the providers within the ACO share in the savings the entity achieves for the Medicare program.

Some Medicare ACOs in Missouri include BJC HealthCare and Heartland Regional Medical Center. Both hospital systems act as ACOs within the Centers for Medicare and Medicaid Services’ (CMS) Medicare Shared Savings Program.

ACOs were first termed in 2006 during a conversation at a Medicare Payment Advisory Commission (MedPAC) meeting, which was aimed at controlling Medicare costs. Different variations of the health delivery model have evolved since.

Medicaid ACOs

One variation of an ACO is a Medicaid ACO, which some states have begun to plan and implement.

According to the Kaiser Commission on Medicaid and the Uninsured, “the structure of Medicaid ACO initiatives is influenced by individual states’ history and experience with managed care, other existing delivery arrangements within Medicaid and the challenges inherent in serving low-income and chronically ill populations.”

Several states have chosen to adapt different variations of a Medicaid ACO model.

For example, a law signed in New Jersey in August 2011 established a three-year Medicaid ACO demonstration project. The project requires applicants to be “nonprofit organizations serving a minimum of 5,000 Medicaid beneficiaries within a designated region.” It also specifies that the ACO “contract with 100 percent of the hospitals, 75 percent of the primary care providers and at least four mental health providers within the intended service region.”

Another example is Colorado’s Medicaid ACO program, known as the Accountable Care Collaborative. Medicaid recipients receive the standard Medicaid benefits, but they also belong to a Regional Care Collaborative Organization, which connects them to Medicaid providers and other services within the community.

Future of ACOs in Missouri

Thomas McAuliffe, a policy analyst at the Missouri Foundation for Health, said there are some pros and cons associated with Medicaid ACOs and Missouri.

“ACOs would give Medicaid patients a place to go that they can get a kind of full, wraparound care,” McAuliffe said. “They get it in a very cost-effective manner.”

He said a problem with the Medicaid population is that they don’t know how to access health care, and they don’t have the same access opportunities as those with private insurance or Medicare.

“It (a Medicaid ACO) is like a Federally Qualified Health Center for the Medicaid population,” McAuliffe said. “They would have a place to go to get a medical home, which does a better job, a cheaper job, of managing chronic conditions and helping people not acquire chronic conditions. It does it in a more cost-effective manner, saving money to the state and the federal government.”

McAuliffe has two concerns regarding Medicaid ACOs.

“It limits how many people are really going to have access to this,” McAuliffe said. “And, when we talk about getting more people care, do these ACOs actually provide opportunities for more of the underinsured?

“The answer, for your observation, is no.”

Dillon believes the answer for Missouri’s Medicaid system is not in the form of cuts, but in the form of savings, which ACOs could achieve.

“We hope that if you want to really achieve savings, you don’t do it by cutting,” he said. “You do it by identifying where the costs are and building structures around those costs. You can save as much money by being efficient as you can by cutting.”

McAuliffe added that maybe the discussion needs to be based on how to improve the number of people receiving care through Medicaid and not just based on the quality of that care.

“We could designate some Medicaid ACOs, and it would be awesome,” he said. “In concept, it would do a lot of good, but in reality, we would still have 400,000-450,000 people who still don’t have access to insurance, still not covered by Medicaid, still using emergency rooms and still causing higher costs to people who do have insurance.”

Medicaid hearings

This week’s hearings at the Missouri Capitol include:

Topic: ‘Skin in the Game.’

The subjects will include cost sharing, debit cards and high-deductible health plans with Health Savings Accounts.

When: 1 p.m. Tuesday, Oct. 29

Where: House hearing room 3

Topic: Delivery models and managed care bidding.

The subjects will include fee for service, Administrative Services Organizations, Accountable Care Organizations, Health Maintenance Organizations and Preferred Provider Organizations, health care homes.

When: 8 a.m. Wednesday, Oct. 30

Where: House hearing room 3

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