State Delivery System and Payment Strategies Aimed at Improving Outcomes and Lowering Costs in Medicaid

Issue Brief
  1. Center for Health Care Strategies, “Medicaid Accountable Care Organizations: State Update,” (Hamilton, NJ: Center for Health Care Strategies, February 2018), https://www.chcs.org/media/ACO-Fact-Sheet-02-27-2018-1.pdf

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  2. Michael Wilson et al., “The impacts of accountable care organizations on patient experience, health outcomes, and cost: a rapid review,” Journal of Health Services Research & Policy 25 no. 2 (April 2020): 130-138, https://journals.sagepub.com/doi/full/10.1177/1355819620913141

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  3. Office of the Assistant Secretary for Planning and Evaluation (ASPE), Evaluation of the Medicaid Health Home Option for Beneficiaries with Chronic Conditions: Evaluation of Outcomes of Selected Health Home Programs Annual Report - Year Five, Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, May 2017, https://aspe.hhs.gov/basic-report/evaluation-medicaid-health-home-option-beneficiaries-chronic-conditions-evaluation-outcomes-selected-health-home-programs-annual-report-year-five

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  4. Office of the Assistant Secretary for Planning and Evaluation (ASPE), Report to Congress on the Medicaid Health Home State Plan Option, Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, May 2018, https://www.medicaid.gov/state-resource-center/medicaid-state-technical-assistance/health-home-information-resource-center/downloads/medicaidhomehealthstateplanoptionrtc.pdf

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  5. Kevin Grumbach, Thomas Bodenheimer, and Paul Grundy, “The Outcomes of Implementing Patient-Centered Medical Home Interventions: A Review of the Evidence on Quality, Access and Cost from Recent Prospective Evaluation Studies, August 2009,” (Washington DC: Patient-Centered Primary Care Collaborative, August 2009), https://pcmh.ahrq.gov/sites/default/files/attachments/The%20Outcomes%20of%20Implementing%20Patient-Centered%20Medical%20Home%20Interventions.pdf

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  6. Aaron Mendelson et al., “The Effects of Pay-for-Performance Programs on Health, Health Care Use, and Processes of Care: A Systematic Review,” Annals of Internal Medicine 166 no. 5 (March 2017): 341-353, doi:10.7326/M16-1881

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  7. California Health Care Foundation, “Making Quality Matter in Medi-Cal Managed Care: How Other States Hold Health Plans Financially Accountable for Performance,” (Sacramento, CA: California Health Care Foundation, February 2019), https://www.chcf.org/wp-content/uploads/2019/02/MakingQualityMatterMediCalManagedCare.pdf

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  8. New York State Department of Health, 2017 Quality Incentive for Medicaid Managed Care Plans, Albany, NY: New York State Department of Health, 2017, https://www.health.ny.gov/health_care/managed_care/reports/docs/quality_incentive/quality_incentive_2017.pdf

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  9. State fiscal years begin on July 1 except for these states: New York on April 1; Texas on September 1; Alabama, Michigan, and District of Columbia on October 1.

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  10. States were asked to indicate whether the following specified delivery system and payment reform initiatives (including multi-payer initiatives that Medicaid is a part of) were in place as of July 1, 2021: patient-centered medical home (PCMH); Health Home (under ACA section 2703); Accountable Care Organization (ACOs); episode of care; and all-payer claims database.

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  11. Delaware, Minnesota, New Mexico, and Rhode Island did not respond to the 2021 survey; 2019 survey data and publicly available data were used to identify delivery system and payment reform initiatives in place for these states.

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  12. Building off the experience of Health Homes and California’s Whole Person Pilots, the goal of this new benefit is to bring a whole person focus to the care of certain high-need Medi-Cal beneficiaries, e.g., children/youth with complex physical, behavioral, developmental, and oral health needs, individuals who are homeless or at risk of homelessness, among other target populations, to address both their clinical and non-clinical needs. For more information, see:

    State of California – Health and Human Services Agency, CalAIM Enhanced Care Management Policy Guide, Sacramento, CA: State of California – Health and Human Services Agency, September 2021, https://www.dhcs.ca.gov/Documents/MCQMD/ECM-Policy-Guide-September-2021.pdf

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  13. Centers for Medicare and Medicaid Service, Health Insurance Exchange Quality Ratings System 101, Baltimore, MD: Department of Health and Human Services, August 15, 2019, https://www.cms.gov/newsroom/fact-sheets/health-insurance-exchange-quality-ratings-system-101

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  14. Center for Medicaid and CHIP Services, 2020 Medicaid and CHIP Managed Care Final Rule, Baltimore, MD: Department of Health and Human Services, November 9, 2020, https://www.medicaid.gov/medicaid/managed-care/guidance/medicaid-and-chip-managed-care-final-rules/index.html

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  15. Under 42 U.S.C. 1396u–2 §(a)(3)

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  16. South Carolina Healthy Connections Medicaid, Policy and Procedure Guide for Managed Care Organizations, Columbia, SC: South Carolina Health Connections Medicaid, April 2021, https://msp.scdhhs.gov/managedcare/sites/default/files/MCO%20PP%20April%202021%20Final.pdf

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  17. National Association of Medicaid Directors, “Medicaid Value-Based Purchasing: What Is It & Why Does It Matter?” (Washington, DC: National Association of Medicaid Directors, January 2017), http://medicaiddirectors.org/wp-content/uploads/2017/01/Snapshot-2-VBP-101_FINAL.pdf.

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  18. For example, in Pennsylvania, the APM target for the HealthChoices physical health MCO program and the behavioral health managed care program is 50% and 20%, respectively, for calendar year 2021. Likewise, Virginia sets a lower percentage (10%) for its MLTSS program, Commonwealth Coordinated Care Plus, than for its Medallion 4.0 Medicaid physical and behavioral health managed care program that serves the state’s low-income children and families and the APM target is set at 25%.

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  19. The thirteen states are Arizona, District of Columbia, Hawaii, Louisiana, Michigan, New Hampshire, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Virginia, and Washington.

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  20. Health Care Payment Learning & Action Network, “Alternative Payment Model (APM) Framework,” (McLean, VA: The MITRE Corporation, 2017), https://hcp-lan.org/workproducts/apm-refresh-whitepaper-final.pdf. CMS launched the LAN in 2015 to encourage alignment across public and private sector payers by providing a forum for sharing best practices and developing common approaches to designing and monitoring of APMs, as well as by developing evidence on the impact of APMs.

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  21. Under 42 CFR §438.6(c)

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  22. Health Care Payment Learning & Action Network, “Alternative Payment Model (APM) Framework: Fact Sheet,” accessed at: http://hcp-lan.org/workproducts/apm-factsheet.pdf. CMS launched the LAN in 2015 to encourage alignment across public and private sector payers by providing a forum for sharing best practices and developing common approaches to designing and monitoring of APMs, as well as by developing evidence on the impact of APMs.

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  23. These efforts include the Vermont Medicaid Next Generation Accountable Care Organization (ACO) program under the Vermont All-Payer Accountable Care Organization Model agreement with CMS. Fifty-four percent of Vermont’s FFS Medicaid payments are reported to be in LAN Categories 3 and 4 APM models. For information on Vermont’s All-Payer Agreement with CMS, see:

    Centers for Medicare and Medicaid Service, Vermont All-Payer ACO Model, Baltimore, MD: Department of Health and Human Services, last updated August 31, 2021, https://innovation.cms.gov/innovation-models/vermont-all-payer-aco-model

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Appendices
  1. National Committee on Quality Assurance, “Patient-Centered Medical Home Recognition,” (Washington, DC: National Committee on Quality Assurance, accessed October 10, 2019), http://www.ncqa.org/Programs/Recognition/Practices/PatientCenteredMedicalHomePCMH.aspx

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  2. Colorado Department of Health Care Policy and Financing, Accountable Care Collaborative Phase II, Denver, CO: Colorado Department of Health Care Policy and Financing, accessed September 12, 2021, https://www.colorado.gov/pacific/hcpf/accphase2

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