Medicaid ACOs: A Natural Progression in Community-Based Care

It is clearer than ever that there is nothing stable about health system change.  For the last 25 years our health system has “played around” with PPOs, HMOs, PHOs, CINs, and MCOs; however, now all of that “acronym alphabet” is finally hard at work in the Accountable Care Organization (ACO).  Started under the Affordable Care Act in 2012, this community-based health care organization is charged with delivering high quality-care at a lower cost to a more satisfied patient/customer.  We all know this as the Triple Aim.

This intensified focus on the Medicare fee-for-service beneficiary in the form of the Medicare Shared Savings Program (MSSP) drove the physician collective to quickly realize that all Medicare patients would benefit from the practical care process delivered through the ACO.  Medicare Advantage (MA), an earlier program started under the Balanced Budget Act of 1997 where commercial insurers managed the financial risk of the program, recognized the importance of physician engagement.  In fact, in many communities, physician-led clinically-integrated networks (CINs) had already moved forward working with MA programs on efficiently delivering care with cost and quality firmly in mind.   Combining the care of all types of Medicare patients in one community-based organization is making increasing sense.

Doctors usually do not segment patients by insurance carrier in the examination room or at the bedside, so the practicality of including their whole patient panel into the preventive quality measures and measured outcome metrics guided by the MSSP and MA programs simply makes for good practice.  While some physicians are struggling with having to take downside financial risk being mandated by CMS in the newly-introduced Pathways to Success program, the community-based ACO continues to move forward.

Over the last decade Medicaid has moved into managed care where commercial insurance companies have assumed the financial risk of delivering care to Medicaid beneficiaries.  While managed care organizations do not deliver care, they pay for care and may help manage some of the peripheral support functions that are designed to bring efficiency.  In our changing world it then becomes a natural progression for community physicians to become more involved in the management of both the financial risk and the clinical outcomes of their entire practice population.  As this process of managing a practice population unfolds, sensible caution is advised because most practices are fairly diverse and not a homogeneous collection of individuals.

Managing a Medicaid program is not like managing a traditional insurance product.  Medicaid is made up of a series of unique populations.  The largest population in Medicaid consists of children and pregnant women.  This group generates the greatest volume of services; however, it is not the greatest expense.  Mental health services continue as a growing challenge to the Medicaid leadership.  Although mental health integration with allopathic medicine has been initially slow, managed care is speeding up that process.  Now that mental health disorders are achieving parity in payment, there is a pressing demand for parity in performance. 

Medicaid also carries the complex financial and clinical burden of managing the developmentally-disabled population.  This is a population of uniquely complex individuals with widely disparate needs.  Nonetheless, serving this group in a managed care setting is pushing innovation and creativity in a productive direction.  In both the mentally and the physically disabled populations the objective is no longer just to “warehouse” these complex individuals, but rather to introduce remedies that will return them to the productive population whenever possible.

Medicaid also carries the management cost of the Dual Population.  These folks, who are covered by both Medicare and Medicaid, are often in a unique situation because of their depleted health status and related poverty.  While there is a directed effort to keep as many of this population at home, nursing home costs still consume a large share of Medicaid resources each year.  Managing these resources with both efficiency and compassion is a special challenge for each state’s Medicaid program.

The Medicaid ACO  has an opportunity to have a favorable impact on this segment of our society.  To do this type of complex integrated care, the ACO must have a powerful analytical system that will rationalize a variety of complex data resources to the beneficiary level.  Salient’s Interactive Miner has already demonstrated “on the ground” capacity to bring together several different sources of data such as standard claims information, selected electronic medical record data, and social determinants of healthcare so that the ACO can see a more complete picture of a particular beneficiary.  Then by using this supporting information, the ACO, the primary care practice, and the care/case management team can track the individual appropriately.  This energized process is in stark contrast to the current multiple uncoordinated individual provider attempts at caring for the patient.  By shifting the care along with the outcome and the financial responsibility as close to the beneficiary as possible, we have a chance to achieve better care at a lower cost delivered to a more satisfied patient/beneficiary.  We already know this as the Triple Aim.


Craigan Gray

About the Author


Craigan Gray, MD, MBA, JD

Dr. Craigan Gray, Salient Healthcare’s Chief Medical Officer, brings rich experience from private practice, hospital leadership, and governmental health-benefit programs. Prior to joining Salient, Dr. Gray was director of North Carolina’s $12 billion Medicaid program. His time as VPMA at Bon Secours Our Lady of Bellefonte Hospital in Kentucky was distinguished by moving the facility into the top-quality performance tier for Health Grades and CMS health quality indicators. Dr. Gray is a Stanford University trained Obstetrician/Gynecologist. In addition to an MD degree, Dr. Gray holds an MBA degree and a JD degree. He is a Certified Physician Executive and is published in various medical journals.

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