Medicaid Managed Care Plans and Access to Care: Results from the Kaiser Family Foundation 2017 Survey of Medicaid Managed Care Plans

Definitions of Payment and Delivery System Reform Models


Fee-for-Service (FFS): In a FFS system, payers establish the fee levels for covered services and pay participating providers directly for each service they deliver. Providers do not bear any financial risk.

Pay-for-Performance (P4P): P4P is a health care payment model that rewards providers financially for achieving or exceeding specified quality benchmarks or other goals. P4P payments may be made based on performance on structure, process, and/or outcome measures, with providers evaluated against benchmarks or by comparison with other providers.

Shared Savings Arrangements: Under shared savings arrangements, organizations or ACOs have an opportunity to share in any net savings that accrue to a payer for a defined panel of patients over a specified time period (usually 12 months). Actual costs for the patient panel are compared to a pre-established benchmark that is determined using historical utilization and/or cost data for the patient panel or a similar population. To be eligible for savings, provider organizations/ACOs must meet performance/quality requirements while also reducing costs.

Shared Risk Arrangements: Entities that enter into shared savings arrangements with payers may also agree to share in losses. Risk-sharing is often added to shared savings arrangements after some experience has been accumulated. Under a shared risk arrangement, if actual costs for the defined patient population exceed the benchmark, the provider group/entity is accountable for a portion of the excess costs and must return funds to the payer.

Episode of Care Payment: Episode of care payments are single, pre-established amounts paid to providers for the set of services involved in treating a patient’s health event, such as a knee replacement, or a particular health condition, such as asthma, over a specified period of time. Episodes have a defined beginning and end and usually involve payment for multiple services and providers. Episode of care payments can be prospective or retrospective.

Global Payments/Bundling: Global bundling involves a single, pre-set payment for a wide range of services delivered to an individual over a defined period of time, usually one year. Global payment amounts are risk-adjusted based on the patient’s health and other characteristics that may affect the services needed, such as age or gender. In addition, global payment models incorporate outcome or quality measures to safeguard against under-service and reward high performance.


Accountable Care Organization (ACO): There is currently no uniform federal definition of an ACO, and the concept continues to evolve. Generally, an ACO is a group of health care providers that agrees to share responsibility for the health care delivery and outcomes for a defined population. The organizational structure of ACOs varies, but, in concept, ACOs generally include primary and specialty care providers and at least one hospital. Providers in an ACO are expected to coordinate care for their shared patients to enhance quality and efficiency, and the ACO as an entity is accountable for that care, specifically for the quality and total cost of care.

Patient-Centered Medical Home (PCMH): Under a PCMH model, a physician-led, multi-disciplinary care team holistically manages the patient’s ongoing care, including recommended preventive services, care for chronic conditions, and access to social services and supports. Generally, providers or provider organizations that operate as a PCMH seek recognition from organizations like the National Committee for Quality Assurance (NCQA).

Health Home (HH): Section 2703 of the Affordable Care Act (ACA) established the Medicaid health home (HH) program. The Medicaid HH model builds on the patient-centered medical home concept. Targeted to individuals with multiple chronic conditions, including serious mental illness, HHs are designed to be person-centered systems of care that facilitate access to and coordination of the full array of primary and acute physical health services, behavioral health care, long-term services and supports, and social service supports. HHs establish care plans for Medicaid beneficiaries, and coordinate and integrate clinical and non-clinical services. HH providers are required to report quality measures established by CMS.

Physical and Behavioral Health Integration: There are a continuum of activities that facilitate the integration of physical and behavioral health care, including information sharing between providers to co-location of providers.

Discussion Methods

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