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CMS Announces New Medicare-Medicaid ACO Model

December 15, 2016
by Rajiv Leventhal
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Feds’ newest ACO model will offer the opportunity for provider organizations to take on accountability for both Medicare and Medicaid costs and quality for their beneficiaries

The Centers for Medicare & Medicaid Services (CMS) today announced a new accountable care organization (ACO) model, an initiative designed to improve the quality of care and lower costs for beneficiaries who are enrolled in both Medicare and Medicaid.

The new model, the Medicare-Medicaid Accountable Care Organization Model, builds on the current Medicare Shared Savings Program and advances efforts to partner with states in transforming the healthcare delivery system, CMS said in a press release announcement.

In current Medicare ACO initiatives, beneficiaries who are Medicare-Medicaid enrollees may be attributed to ACOs. However, Medicare ACOs often do not have financial accountability for the Medicaid expenditures for those beneficiaries. Through the new model, CMS intends to partner with interested states to offer ACOs in those states the opportunity to take on accountability for both Medicare and Medicaid costs and quality for their beneficiaries. CMS is adding the Medicare-Medicaid ACO Model to its existing portfolio of ACO initiatives, which include:

    Medicare Shared Savings Program (Shared Savings Program)

    Pioneer ACO Model

    Next Generation ACO Model

    ACO Investment Model (AIM)

    Comprehensive ESRD Care (CEC) Model

To date, there has been mixed results in CMS’ Medicare ACO programs. While the financial savings have not been significant of date for most federal ACOs, the quality outcomes improvements are praiseworthy. At the same time, those ACOs who have been in these programs since their inception tend to do better than new entrants.

Drilling down further, CMS notes that some of the highest-need, highest risk Medicare beneficiaries are those enrolled in both Medicare and Medicaid. As such, the Medicare-Medicaid ACO Model is an initiative designed by the CMS Innovation Center for new and existing Shared Savings Program ACOs wishing to take on accountability for the full spectrum of Medicare Part A, Part B, Medicaid costs, and quality for their patients.

Certain aspects of the model may vary by state, but the over-arching principles and parameters will be consistent across it. If Medicare-Medicaid ACOs in the state generate Medicare savings for their Medicare-Medicaid enrollees, states (as well as the Medicare-Medicaid ACO) may be eligible to share in those savings with CMS, the agency stated.

CMS said the Medicare-Medicaid ACO Model is open to all states and the District of Columbia that have a sufficient number of Medicare-Medicaid enrollees in fee-for-service Medicaid. CMS will enter into participation agreements with up to six states, with preference given to states with low Medicare ACO saturation.

What’s more, through the Medicare-Medicaid ACO Model, CMS said it seeks to encourage participation from safety-net providers in Alternative Payment Models (APMs). Medicare-Medicaid ACOs that qualify as “Safety-Net ACOs” will be eligible to receive pre-payment of Medicare shared savings to support the ACO’s investment in care coordination infrastructure.

According to officials, the Medicare-Medicaid ACO Model includes strong patient protections to ensure that patients have access to and receive high-quality care. Like other CMS ACO initiatives, this Model will be evaluated on its ability to deliver better care for individuals, better health for populations, and lower growth in expenditures. In addition, CMS will publicly report the performance of the Medicare-Medicaid ACOs on quality metrics, including patient experience ratings, on its website.

States may choose from three options for when to begin the first 12-month performance period for the model ACOs in the state: January 1, 2018; January 1, 2019; or January 1, 2020.

“This model aims to provide improved care coordination for those enrolled in both Medicare and Medicaid, allowing providers to focus more on providing care for their patients rather than administrative work,” Patrick Conway, M.D., CMS acting principal deputy administrator, said in a statement. “CMS continues to partner with and leverage the best ideas from states to transform our health care system to improve quality and care coordination. In the long run, this partnership will result in healthier people and smarter spending.”

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