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December 2013 Policy Study, Number 13-12


Iowans Want to Age in Place


The Future of HCBS: Change Is Coming



Another provision in Title III of the PPACA of 2010 was for the formation of accountable care organizations (ACOs). Most states, in an attempt to control their portion of Medicaid spending, have outsourced their programs to managed care organizations. ACOs that are financed through capitation, much like the PACE programs, capitalize on the cost controls of managed care but emphasize quality outcomes with additional financial incentives. ACOs can take on various structures including physician groups, hospital systems, and other health care providers with collaborative agreements to provide care. Originally built upon the idea of serving the Medicare population, ACOs are finding great appeal in state Medicaid restructurings, Iowa included.


Instead of an optional program like PACE, a Medicaid ACO would function much like a PCMH with emphasis on care coordination that is founded on HCBS for eligible patients. Theoretically, waivers would become a thing of the past, as the capitated-payment structure would require comprehensive care in the most cost-effective and patient-preferred setting. ACO providers would take responsibility for the quality of care provided to patients in their region/ACO in return for the opportunity to share in savings realized through high-quality, well-coordinated care.


The success of ACOs goes beyond simply determining organizational structures and payment systems, but depends on collaboration with county public-health departments and other community-based organizations that can fill gaps, providing holistic care and services to eligible patients. Of course, information resources such as electronic health records and interface capability as well as mutually agreed upon measures for performance and care quality will be vital and must include all the key players in the ACO. Just as CMS collects data related to outcome measures and costs, states will need to follow suit. This information must be timely and available to all stakeholders. States will need to understand ACO formation, sustainability, and accountability. This is because the path is not as delineated for policy best practices related to ACOs as well as how to increase participation in the states commitment to the Triple Aim.[80] The choices that states make in outlining their Medicaid ACOs and related innovations will be vital to ensure successful changes in how payments are made and care is delivered for HCBS over the next ten years – taking us into the sixth decade of Medicaid HCBS




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