Medicare-Medicaid ACO Model: Urge Your State to Apply by Jan. 20

January 20 is a significant date for healthcare providers—but not necessarily for the reason you think.

Yes, there is the inauguration of the 45^th President of the United States, who has vowed to “repeal and replace” the most significant healthcare legislation in recent history.

But that date has even greater significance for the many providers across the country who are struggling to cover the cost of care of an increasingly high-risk, low-income population.

CMS announced in December a new Medicare-Medicaid ACO Model, which enables participating providers to take financial accountability for the Medicaid costs, in addition to the Medicare costs, for dual enrollees.

What is the Deadline?

States that want to be considered for participation in the model have a three-tiered deadline. For a 2018 performance year, states must submit a Letter of Intent by January 20, 2017. States seeking to launch their MMACO in 2019 must apply by August 4, 2017; for a 2020 start, the deadline is August 3, 2018.

States also have an opportunity to help design certain state-specific elements of the MMACO Model, such as details of the Medicaid payment methodology, selection of quality performance measures, and shared savings/losses arrangements.

Competition for this new ACO model will be stiff. CMS will choose only six states  for participation, although the program is open to all states and the District of Columbia, as long as they have a sufficient number of Medicare-Medicaid enrollees.

Once a state is accepted by CMS, then the agency will work with each state to release a request for applications to ACOs. Clearly, this will need to happen quickly to enable a Jan. 1, 2017 start date.

How Will CMS Choose?

Details are light at this point, but CMS has said that preference will be given to states with “low Medicare ACO saturation.” But that doesn't necessarily mean that states with high participation in ACO models shouldn’t bother to apply. Any state with a good story to tell in population health could be competitive, since CMS has a history of looking for a demonstrated ability to lower costs, improve access to care, and improve quality outcomes.

The bottom line is that this new model seeks to provide a “safety net” for the dual-enrollee population, many of whom lack access to affordable coverage for many important healthcare services. CMS is sweetening the pot for ACOs that target this population by offering prepayment of Medicare shared savings for ACOs that qualify as Safety Net ACOs, although it has not yet said how it will define them.

Why Participate?

States with high populations of low-income and chronically ill patients have a lot to gain from this model—as do the patients themselves.

But what about you as a provider? Your organization already is at risk for these “safety net” patients. This program provides an opportunity to prevent some of those expensive “rescue care” situations, and it also offers the opportunity to share in the savings that accrue when patients receive the appropriate care in an appropriate setting at the appropriate time.

Also remember that the volume to value change is happening with or without you. Payment reform will continue to move toward greater risk sharing, both at the health system level and, with the implementation of MACRA, at the physician or medical professional level.

While CMS has not said so explicitly, the MMACO Model does seem to fit within the definition of an Advanced Alternative Payment Model (APM) as defined by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Why is this important?  Due to the limited number of approved APMs, many providers will start out in the Merit-Based Incentive Payment System (MIPS). However, in the long term physicians will do better under the more advanced risk-sharing provisions of an APM.

What Can I Do?

Since the model offers to alleviate some of the relentless downward margin pressure with which just about every provider in the country is grappling, every provider and every state should have incentive to throw their hat in the ring.

Urge your state hospital association or state medical association leadership to reach out to your state’s health policy decision makers to stress the importance of getting in on the ground floor of this new model.

Also note that, although participating ACOs must sign a Shared Savings Program Participation Agreement, they do not have to be currently participating in the Shared Savings Program to submit a letter of interest. So if your organization is not already part of an ACO, this is your chance to design one that will meet CMS’ requirements for MMACOs.

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