Medicaid is Expanding with ACOs and DSRIP Programs Leading The Charge

Why The MACPAC Beneficiaries Decision Matters To You

Today Medicaid is playing an increasing role in the US healthcare system with more than one in five Americans covered by Medicaid.  This growth in the number of individuals served and services provided has put increased pressure on Medicaid leaders to find innovative ways to improve care for individuals while decreasing overall costs.  In their report, “Implementing Coverage and Payment Initiatives,” the Kaiser Commission on Medicaid and the Uninsured appointed Health Management Associates to survey Medicaid directors in all 50 states to identify and track trends in Medicaid spending, enrollment and policy making. Two growth areas in the last year were highlighted — Medicaid Accountable Care organizations (ACOs) and Delivery System Reform Incentive Payment (DSRIP) projects.

Accountable Care Models

The movement toward establishing state-based Medicaid ACOs is gaining momentum.  These ACOs combine primary and behavioral healthcare with community-based providers which address the social determinants of health for vulnerable populations. According to the Center for Healthcare Strategies, “States have been actively pursuing innovative care delivery and payment models in order to improve the capacity of the health system to deliver high-value care and increase provider accountability, particularly for high-need populations facing multiple health challenges. The common goal of these initiatives is to coordinate a wide array of needed services to improve the quality of care and curb costly and avoidable hospitalizations of Medicaid beneficiaries, particularly those with multiple chronic conditions and behavioral health needs.”

As of September 2016, ten states have launched Medicaid ACO programs, with another six states pursuing plans to restructure their delivery systems and payments from fee for service to integrated Medicaid ACOs.  One such state is Massachusetts.  The state plans to launch an ACO pilot by the end of 2016, with a full ACO roll-out planned for 2018. Under the new program, Medicaid ACOs will be required to collaborate with community partner organizations that address the social determinants of health. Providers will operate with per-person capitated payments which require improving the overall well-being of enrollee populations rather than just treating sick patients.

DSRIP Projects

Prompted by the desire to achieve the Triple Aim — improving population health, enhancing the care experience, and reducing the per capita cost of care — states are implementing innovative programs to reform how care is delivered and paid for. DSRIP initiatives are part of broader Medicaid 1115 waiver programs that support hospitals and other providers in changing how they provide care to Medicaid beneficiaries. While the exact structure and requirements of each DSRIP initiative vary, the initial focus is on meeting metrics such as system redesign or infrastructure development and later meeting clinical health or population-based improvements.

According to Kaiser’s report, seven states had Delivery System Reform Incentive Payment (DSRIP) programs in place in FY 2015, four states reported new or expanded DSRIP programs in FY 2016, and five states reported new or expanded DSRIP programs in FY 2017.  The State of New York is a national leader in DSRIP programs.  Their goal is to “reduce avoidable hospital use by 25 percent through transforming the New York State health care system into a financially viable, high performing system. New York’s DSRIP program requires Medicaid providers and community-based organizations to form integrated delivery networks (Performing Provider Systems) as a condition of receiving DSRIP funding. Today, 25 PPS networks are implementing a variety of projects to build care management and population health management infrastructure, enhance disease management programs for targeted chronic conditions, and improve population health.

In the next few years, states will continue to focus on improving their programs through value-based care and innovative delivery system reform strategies. Our ClientTrack Care Coordination software enables states in this endeavor by connecting providers through an integrated population health strategy that reforms how care is delivered and paid for.

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