Medicaid Accountable Care Organizations: State Update

February 2018

This resource is a fact sheet about Medicaid ACOs, which align provider and payer incentives to focus on value instead of volume. To date, 10 states have launched Medicaid ACO programs, and six more states are actively pursuing them.

  • Provider accountability is achieved through three key activities: implementing a value-based payment structure, measuring quality improvement, and collecting and analyzing data.
  • States typically use one of two models: Shared Savings Arrangement (participating providers have an opportunity to share in savings) or Global Budget Model (ACOs receive a capitated per-patient payment and accept full financial risk for the health of their patient population).
  • Quality metrics — such as health outcomes, service delivery, and patient experience metrics — are used to track whether Medicaid ACOs improve patient outcomes and are tied to payment. Providers typically will not receive any of the shared savings if they do not meet the benchmarks.
  • States implementing ACOs must establish and maintain their own data infrastructure.
  • Some state programs have shown promising results. For example, Colorado’s Regional Care Collaborative Organizations have reported $77 million in savings for Colorado Medicaid through lower rates of emergency department visits, high-cost imaging, and hospital readmissions.
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Population Addressed
People with Multiple Chronic Conditions
People with Behavioral Health and Social Needs
Key Questions Answered
  • How do state Medicaid accountable care organizations (ACOs) work?
  • Which states are implementing them, and what are the different models?
  • What are the results to date?
Level of Evidence
Expert Opinion
What does this mean?