Can Medicaid be a Model for ACO Innovation?

Philip Betbeze, for HealthLeaders Media , July 26, 2013

He cites one project in Alabama being piloted with the help of the American Hospital Association. It's a Medicaid reform program that is set up around regional care organizations. These multi-stakeholder organizations would contract directly with the state on a prepaid basis to cover Medicaid beneficiaries in the designated territory.

Legislation to implement the program has passed, and Enders says the regional organizations are now in the process of working through details in how to implement them and the regions will be announced in the fall.

"That's a concept for Medicaid that is very innovative," says Enders. "Oregon has done a very similar thing and it's transferable for other states. In effect they're Medicaid ACOs."

Deciding when and how to enter an ACO of any kind is putting unique pressure on leaders of hospitals and health systems, Enders says, but that breeds dynamism of action as many of these structures ramp up.

"Many feel there is a window of opportunity to line up their team," he says. "In a lot of markets, everyone's talking to everyone, so if I'm not forming or participating in an ACO, that could materially affect my future chances."

One thing is clear: Reimbursements from Medicaid and Medicare will go down, and commercial reimbursement will also go down to reach the level of inflation, Enders says.

"It's a time of very significant change," Enders adds. "Many of these CEOs realize they need to prep for an alternative model and need to test and organize within their organizations."

Philip Betbeze is senior leadership editor with HealthLeaders Media.
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