Harmony Healthcare Blog

Accountable Care Organizations Update:  ACOs and Medicaid

Posted by Melissa Fox on Wed, Nov 23, 2016

Edited by Kris Mastrangelo


Compliance • Audits/Analysis • Reimbursement/Regulatory • Education/Efficiency

ACO_image.jpgAcross the country, states are exploring the viability of Medicaid Accountable Care Organizations that align the provider and payer incentive to focus on value instead of volume.  The Center for Medicare and Medicaid Services is currently aligning partnerships in order to identify a collaborative approach to providing better care at an efficient cost.  During the harmony16 LTPAC Symposium, Harmony Healthcare International (HHI) presented on the upcoming changes to CMS initiatives with Medicaid Beneficiaries.  The following topics were discussed:

  1. Who is involved?
    As we draw close to the end of Calendar year 2016, 10 States to date have launched ACO programs in conjunction with Medicaid beneficiaries and six more states are actively pursuing them.
    • Active Medicaid ACO states: Colorado, Illinois, Maine, Minnesota, New Jersey, New York, Oregon, Rhode Island, Utah, Vermont 
    • States Perusing Medicaid ACO program: Washington, Massachusetts, Connecticut, Maryland, North Carolina, Alabama 
  1. What are the Key Activities for Medicaid ACOs?
    The Center for Medicare and Medicaid Services reports that the Key activities for Medicaid ACOs are:
    1. Implementing a value based payment structure
    2. Measuring quality improvement
    3. Collecting and analyzing data 

CMS reports that programs including the Pioneer ACO, Medicare Shared Savings Program ACO, the Next Generation ACO and Medicaid ACOs are successfully providing the clinical initiatives to deliver high quality care while spending health care dollars wisely.
However, many Long-Term Post-Acute Care providers who partner with the ACO participant model are often left in the dark when it comes to understanding the payment reform. It is important that all providers understand the quality measure and payment model. 


  1. How is Value Based Payment defined?
    SNF providers should empower their facilities with the knowledge of what the Value Based Payment Structures within each Medicaid ACO program will entail.  As Providers self-examine the payment arrangements, the ACO contracts are identified to be delineated into three different payment models as per Center for Medicare and Medicaid Services:
    1. Shared Savings Model: providers are reimbursed via fee-for-service, and at the end of the year split with the payer any savings generated (as measured against pre-specified benchmarks). Providers are often eligible to keep a larger proportion of these savings if they also agree to share in any losses or costs above pre-specified benchmarks. The Medicare Shared Savings Program is a version of this type of contract.
    2. Global Budget Model: providers have a predetermined global budget for their assigned patient population that is reconciled at the end of the year. If costs are below the global budget, the ACO retains these savings; if costs are above the global budget, the ACO is responsible to pay back some or all of these losses.
    3. Capitated Model: providers are paid in advance a set amount per assigned ACO patient and often bear full financial risk; they are responsible for any costs they incur above their capitated payment but retain any savings if their costs are below the capitated payment.
  1. Quality Measurement and Improvement?
    Data mining is fast and furious. The LTPAC industry is inundated with requests for quality of care measurement that will directly impact the providers national rating as well as financial incentives. CMS has designed an individualized quality measurement model that is used to track whether Medicaid ACOs improve patient outcomes and to ensure that providers are NOT withholding health services to retain savings. These Benchmarks are established and are compared to quality benchmarks.

    Benchmarks of:
    • health outcomes
    • report process metrics that focus on service delivery
    • record patient experience metrics to determine the ACO quality performance 
  1. What will be the Results of Data Analysis and Health Information Technology?
    • Timely and accurate data collection and analysis are essential to a Medicaid ACO's operation, since data allows ACOs to track patient utilization and costs, and target patients for care management interventions and programs.
    • States implementing ACOs must establish and maintain their own data infrastructure to adequately support ACOs and determine which organizational entity will “own” — i.e., store and analyze — ACO data. States may consider helping providers with financial resources to facilitate the implementation of health information technology that supports ACO data management needs.

Please contact Harmony Healthcare International (HHI) if you would like education for your staff on Accountable Care Organizations or Value-Based payment models.  Education will include how to accurately select the correct code and how to justify that selection (e.g., within their documentation).   You can contact harmony by clicking here or calling 800.530.4413.


Tags: ACOs, Medicaid, Accountable Care Organizations

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