Medicaid payments are increasingly becoming state budget busters as the program covers frequent emergency room admissions and outpatient tests, according to Kaiser Health News.
Here are four things to know about why some states are turning to Medicaid ACOs to alleviate financial load:
1. Minnesota is one of the states that has implemented an ACO model for its Medicaid program. The state rewards providers and hospitals that lower costs by maintaining enrollees' health. Addressing enrollees' social determinants, such as lack of transportation, poor diet and homelessness, is one of the ways providers are attempting to keep enrollees healthy.
2. Twenty-one health systems in Minnesota participate in the ACO model, according to KHN. ACOs get to share in any money saved under the model, if they are able to hold spending below a budget and attain specific quality targets.
3. Nearly half a million Medicaid recipients receive care under Minnesota's ACO. The state said its model has saved $213 million since 2013, with Minnesota hospitals and providers getting $70 million.
4. However, the model is not as efficient as anticipated in other states, according to KHN. A federal study released in March found across six states using ACOs, Medicaid enrollees did receive more primary care services; however, the program failed to lower hospital visits or costs in most of the states.