Health Policy$ense

The Potential and Unique Challenges of Pediatric Medicaid ACOs

Early Evidence That State Medicaid Programs Could Benefit From Implementing Model

Much of what we hear about Accountable Care Organizations (ACOs) has to do with how well, or poorly, they’re serving the Medicare population. Medicare ACOs have received a great deal of attention, but less discussed is the application of this new health care delivery model to the Medicaid population.  As of late 2015, nine states had launched Medicaid ACO programs, and ten more were actively pursuing them.

ACOs are networks of health care providers that agree to take clinical and financial responsibility for a defined patient population, with a primary care provider coordinating care. They aim to improve value by reducing fragmentation and inefficiency in the medical system. Unlike HMOs, patients can receive care out of the network and are often “attributed” to the ACO retrospectively, based on where they receive their care.  ACOs vary in how they allocate financial risk, but the general principle is that providers are rewarded if the ACO lowers health care costs while meeting performance standards on quality of care. ACOs are a work in progress, and face many challenges, as evidenced by the “next generation” models recently implemented by CMS as well as by CMS’s proposed changes to the way they assess ACOs.

Recent research in JAMA Pediatrics examined 2013-2015 data from a pediatric Medicaid ACO in Minnesota to assess the effects of the ACO on health care use and costs.  The study finds significant and durable reductions in inpatient days associated with longer attribution to the ACO, with attribution as a proxy for consistent primary care. There was an increase in office visits, emergency department visits, and the use of pharmaceuticals. In total, continuous attribution to the ACO over two years was associated with cost reductions of nearly 16%. However, a major problem for the ACO, and the study, was the retention of patients. The cohort of ACO patients in this study was reduced by 50% after 12 months and 70% after 24 months.

This last point is one of the unique challenges for ACOs that serve a Medicaid population. In an accompanying editorial in JAMA Pediatrics, Magrielle Eisen and LDI Senior Fellow David Rubin of the Children’s Hospital of Philadelphia discuss the implications of the study, which “breaks new ground” in health services research for children. Eisen and Rubin welcome this early evidence that pediatric Medicaid ACOs can reduce health care costs, and urge further research to understand the factors driving high patient turnover in this and other pediatric ACOs. One limitation, described in the editorial and fleshed out in a CHOP blog post, is the lack of data on the socioeconomic status of ACO participants. Eisen and Rubin also explore the level of responsibility ACOs should assume in sustaining patient engagement and what these efforts should look like. Suggestions range from community-based partnerships with infant-home visitation programs, standardized screening for psychosocial or mental health risk within families, or delivery of direct services to support parents.

Eisen and Rubin point to the “terrific opportunity” ACOs present to engage families, improve outcomes, and contain costs. The new study provides early evidence that state Medicaid programs and the families they serve can benefit from implementing the model, and it directs us to key questions that remain in taking full advantage of the opportunity.