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Medicaid Pays for Health Quality Improvement

A key element of health reform is to change the way we pay for care. Paying for value, not volume, emphasizes the importance of achieving positive health outcomes over the number of physician visits or hospital stays. Ensuring that beneficiaries receive high quality care, have a positive experience with the health care system and that health resources are used wisely are high priorities. Medicaid Accountable Care Organizations in a number of states are identifying indicators of access, care coordination and cost-efficiency and have tied provider payments to reaching or exceeding goals related to those indicators. In doing so, they are creating financial incentives to improve quality of care and health outcomes for patients.

Colorado’s Accountable Care Collaborative (ACC) consists of seven Regional Care Coordination Organizations (RCCO) that develop a network of providers; support providers with coaching and information; manage and coordinate member care; connect members with non-medical services; and report on costs, utilization and outcomes for their members. The RCCOs are required to collect data and report on four quality measures, including Emergency Room Visits, Hospital Readmissions, Outpatient Service Utilizations (MRI, CT scans, etc.) and well-child visits. The RCCO must reach or exceed the state’s quality target in order to receive the incentive payment. Measures may be refined or substituted with more specific indicators. In the ACC 2014 Annual Report, the Colorado Department of Health Care Policy and Financing reported that adults enrolled in the ACC more than six months used approximately 8% fewer emergency room services than adults not enrolled. Clients with disabilities, children and adults who were enrolled in the ACC for at least six months used fewer imaging services than those not enrolled (3%, 12% and 16%, respectively). Over the course of the year, the ACC achieved net savings of $29 million to $33 million, after administrative expenses.

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