Accountable Care Organizations, Medicaid and Pediatrics

Accountable Care Organizations (ACOs) are defined as an integrated health care delivery system that relies on a network of primary care physicians, one or more hospitals, and subspecialists to provide care to a defined patient population. Under the model, hospital and physician networks would be responsible for the quality of care delivered to patients and would receive bonuses for providing high-quality, low-cost care.
– Medicare Payment Advisory Commission

While discussion around ACOs has centered almost exclusively on the creation of adult ACOs through Medicare, the Patient Protection and Affordable Care Act of 2010 calls for Medicaid ACO demonstration projects, including a pediatric ACO demonstration project to begin January 1, 2012. The new Center for Medicare and Medicaid Innovation will be focused on driving coordinated care delivery throughout the health care system, but the Act provides broad discretion around delivery system reforms.

Typical Medicare ACOs vs. Medicaid ACOs

• Medicare is one federally-managed system, Medicaid is a state-federal operation which results in differences between states and essentially 50 different programs.

• Unlike Medicare, one size doesn’t fit all. There is so much variance in how states operate Medicaid programs that there will have to be adaptation and innovation around ACOs at the state level.

• Access needs to be a more significant focus within a pediatric-based ACO than a Medicare ACO because of the reliance of pediatrics on Medicaid as a payor. With Medicaid reimbursements at 76 percent of Medicare rates, many practices are closed to Medicaid patients.

General Population vs. Pediatrics

• Pediatrics offers perhaps the biggest opportunity to bend the long-term cost curve in health care.

• While the savings may be less immediate, there is evidence that many of the pervasive, and costly, chronic diseases of adulthood can be successfully prevented in childhood, for example obesity.

• Pediatrics is positioned to provide wellness and care management protocols to more successfully usher/transition children into the adult health care system.