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Medicaid ACOs and Managed Care: A Tale of 2 States

Catherine L. Hersey, MPH, Abt Global; Nate Wiecha, MA, North Carolina State University; Leslie M. Greenwald, PhD, and Stephanie M. Kissam, MPH, RTI International


November 4, 2022

As more people join its rolls, Medicaid is increasingly looking to manage costs through accountable care organizations (ACOs). CMS wants “the vast majority of Medicaid beneficiaries into accountable care relationships by 2030.” ACOs are comprised of healthcare providers who, team up to reduce costs and improve quality for patients. With more than 70 percent of Medicaid beneficiaries enrolled in managed care, which is also tasked with reducing costs and improving quality by effectively managing care, states will need to determine how managed care and accountable care will coexist without creating redundancies or inefficiencies in order to meet CMS’ goal.

Two states, Massachusetts and Minnesota, took very different approaches to combining ACOs and MCOs, and Abt’s Catherine Hersey led a team that analyzed those approaches. The results offer an opportunity for other states to consider what strategies might work for their specific partnerships with Medicaid. This work includes details on engaging stakeholders, attributing beneficiaries, and how savings and losses are shared between providers, payers, and the state.