SummaryAuthorized by the State legislature, the Colorado Accountable Care Collaborative is a primary care–based model for delivering coordinated care to Medicaid beneficiaries. Under this initiative, the State Medicaid agency contracts with regional organizations that serve seven distinct geographic areas. These organizations, in turn, contract with and support primary care–led medical homes in coordinating and managing needed care for enrolled beneficiaries, including specialist, hospital, behavioral health, and social services. The State also contracts with an outside vendor that assists with beneficiary assignment to medical homes and with data collection, analysis, and reporting to support the regional organizations and medical homes in coordinating care and managing population health. The model uses a mixture of payment methodologies, featuring fee-for-service for medical services, capitation for care management and coordination, and financial incentives to promote quality and efficiency. The collaborative has enhanced access to coordinated care for Medicaid beneficiaries, leading to fewer admissions and readmissions, less use of high-cost imaging services, and a slowdown in the growth of emergency department visits. Collectively, these improvements have yielded an estimated $6 million in cost savings for the State.Moderate: The evidence consists of post-implementation data on program enrollment, along with comparisons of key performance metrics between those enrolled in the program and similar individuals who are not enrolled. Metrics include admissions and readmissions, emergency department visits, and use of high-cost imaging services. Additional evidence includes estimates of the net cost savings generated for the State by the program.
Developing OrganizationsColorado Department of Health Care Policy and Financing
Date First Implemented2011
Insurance Status > Medicaid
Problem AddressedTraditional models of health care financing and delivery often lead to ineffective or inefficient care.1 In particular, traditional fee-for-service (FFS) reimbursement creates incentives for providers to deliver more (but not necessarily higher quality) care, which increases costs. Accountable care organizations (ACOs) and similar models have the potential to effectively align incentives for health plan and provider partners and generate better quality at lower cost, but to date only about 10 percent of Americans receive care under this model. Better quality and care coordination is particularly important for the many Medicaid beneficiaries with chronic conditions.
- Misaligned incentives under FFS, leading to high costs: The FFS payment system creates a financial incentive to provide more services (regardless of whether they are needed), which leads to higher costs and insurance premiums but not necessarily better quality.1,2
- Unrealized potential of alternative delivery models: Providers and payers are developing alternative payment and delivery models to help align incentives for physicians, hospitals, and health plans, focusing them on improving quality and managing costs. One of the more popular models is an ACO, an alliance of health plans and providers that agree to take on responsibility for a defined population of patients, typically under a global budget in which partners share any deficits or surpluses. Although this model has shown promise in reducing costs and improving quality,2 less than 10 percent of the U.S. population is served by it.3
- Even greater potential for Medicaid populations: Although medical, mental, and social service providers working alone can provide interventions to address one aspect of an enrollee's health problems, they generally do not have the tools or support to execute a coordinated approach to managing overall health, either individually or at a population level. ACOs and similar delivery models can offer this type of coordinated approach, which can be particularly valuable for Medicaid beneficiaries who disproportionally experience chronic conditions and often face mental health and socioeconomic challenges. For example, a third of female Medicaid beneficiaries age 18 to 64 have high blood pressure and 20 percent have depression, rates that are significantly higher than in the general adult population.4
Description of the Innovative ActivityAuthorized by the State legislature, the Colorado Accountable Care Collaborative is a primary care-based model for delivering coordinated care to Medicaid beneficiaries. Under this initiative, the State Medicaid agency contracts with regional organizations covering the entire State, each serving a distinct geographic area. These organizations contract with and support primary care–led medical homes in coordinating and managing needed care for enrolled beneficiaries. An outside vendor assists in assigning beneficiaries to medical homes and in supporting care coordination and population health management. The model uses a mixture of payment methodologies, including FFS for care delivery, capitation for care management/coordination, and financial incentives to promote quality and efficiency. Key program elements include the following:
- Legislation supporting development: In 2009, the Colorado legislature authorized the Medicaid Value-Based Care Coordination Initiative (later renamed the Accountable Care Collaborative, or ACC) as part of the Department of Health Care Policy and Financing’s fiscal year 2008-2009 Medicaid budget (Senate Bill 09-259). In June 2012, the legislature passed House Bill 12-1281, which authorizes the ACC to pilot test payment reform initiatives.
- State-led selection of regional organizations to manage and coordinate care: In a competitive process that drew applications from health plans, provider partnerships, and community partnerships, the Department of Health Care Policy and Financing designated five organizations as regional care collaborative organizations, or RCCOs. Each of these organizations serves a distinct geographical area, with four each serving one designated region and a fifth serving three contiguous regions (for a total of seven regions). The State pays the RCCOs a per-member-per-month (PMPM) fee to coordinate and manage care for enrollees, working in collaboration with primary care–led medical homes, as described below. (More details on the payment methods used under ACC appear in the bullet labeled "Mixed payment model" below.)
- RCCO support of primary care–led medical homes: Each RCCO contracts with primary care providers that serve as medical homes (known as primary care medical providers, or PCMPs), and develops informal networks of hospitals, specialists, and behavioral health and social service providers. As of January 2014, RCCOs and the State had contracted with 435 provider locations, representing approximately 2,300 rendering practitioners. The RCCOs provide care management, care coordination, and administrative support to the PCMPs with which they contract. RCCOs and PCMPs are free to enter into financial arrangements, but payments between the two are not required. In some regions, the RCCO has delegated care coordination to PCMPs and reimburses them accordingly. In other regions, the PCMPs pay a monthly rate to the RCCO to house more extensive care coordination services. Each RCCO has the flexibility to adopt and pursue its own approaches. Examples of strategies used by RCCOs include embedding care managers into practices, paying for shared care management services, and providing training and technical assistance on care coordination and adoption of electronic medical records. Representatives of the five RCCOs meet quarterly to share best practices.
- Assignment of beneficiaries to medical homes: Medicaid beneficiaries who have an established relationship with a PCMP are automatically enrolled in the program and assigned to that medical home. Those without an existing primary care relationship are enrolled with the RCCO in their region and subsequently asked to choose one of the PCMPs that contract with the RCCO. Newly enrolled beneficiaries receive a letter describing the program. The letter gives them 30 days to opt out of program participation. Beneficiaries who have an existing relationship with a primary care provider who is not part of the ACC are not automatically enrolled in the program. However, these beneficiaries can choose to participate in the ACC by opting in to the program.
- Medical home–led care management and coordination: Through a contract with the State, PCMPs serve as the medical homes for assigned beneficiaries, responsible for providing timely and comprehensive primary care and for assessing and coordinating all specialty, inpatient, behavioral health, and other needs, including social support services such as housing, transportation, child care, and food assistance.
- Mixed payment model: As outlined below, the ACC uses a mixed payment model that features FFS payments for medical care, capitated payments for care management and coordination services, and incentives tied to performance on various efficiency and quality metrics. This payment methodology differs somewhat from that used by a traditional ACO, which generally incorporates both upside and downside risks at multiple levels of the delivery system. In contrast, the ACC currently focuses only on primary care providers and incorporates a small amount of upside (but no downside) risk.
- FFS for medical care services: The State Medicaid program pays the medical homes on a traditional FFS basis for the provision of medical care. Going forward, program leaders are considering alternative reimbursement methodologies to purchase value and pay for performance through strategies such as incorporating a greater degree of risk.
- Capitated payments for care coordination and management: The State Medicaid agency pays both the RCCOs and the medical homes a fixed PMPM fee for care coordination and care management activities. In 2013, this fee ranged from approximately $8.93 to $9.50 to RCCOs (as determined by what the RCCO bid in its proposal) and $3 to the PCMPs.
- Incentives based on performance: In July 2012, the ACC created an incentive pool for the RCCOs and the PCMPs, with each being eligible for an additional $1 PMPM (paid on a quarterly basis) if targets for performance on key metrics are met. Measures include emergency department (ED) visits, readmissions, use of high-cost imaging services, total PMPM costs of care, and the provision of well-child visits (added in 2013).
- Data collection, performance measurement, and related support: The State contracts with a vendor to serve as the statewide data analytics contractor, or SDAC. This contractor takes charge of various tasks, including assigning eligible beneficiaries to a PCMP, collecting performance data from PCMPs, creating and maintaining a data repository, and providing actionable patient-level data and analytical reports to the ACC, the RCCOs, and the PCMPs via a Web portal. The registry includes data related to Medicaid eligibility, paid claims, and behavioral health. Client-level data can be used by the RCCOs and PCMPs to identify clients with significant needs and to support care management and coordination activities for these individuals. Population-level data can be used to identify the need for and otherwise inform quality improvement activities within the medical homes and RCCOs and for the program as a whole.
Context of the InnovationThe Colorado Department of Health Care Policy and Financing administers the State Medicaid program along with other programs for low-income families, the elderly, and individuals with disabilities. In the late 1990s and early 2000s, many managed care plans withdrew from the Colorado Medicaid program due to low reimbursement rates, leaving more than 80 percent of the State’s Medicaid population in an unmanaged FFS payment system. In 2007, the Governor’s Blue Ribbon Commission on Health offered a series of recommendations for reforming the Medicaid care delivery and payment system. Informed by these recommendations, the Colorado Department of Health Care Policy and Financing developed the ACC model and requested that the State legislature authorize it as a budget-neutral item in its 2009 budget.
Results The collaborative has enhanced access to coordinated care for Medicaid beneficiaries, leading to fewer admissions and readmissions, less use of high-cost imaging services, and a slowdown in the growth of ED visits. Collectively, these improvements have yielded an estimated $6 million in cost savings for the State.5
Moderate: The evidence consists of post-implementation data on program enrollment, along with comparisons of key performance metrics between those enrolled in the program and similar individuals who are not enrolled. Metrics include admissions and readmissions, emergency department visits, and use of high-cost imaging services. Additional evidence includes estimates of the net cost savings generated for the State by the program.
- Enhanced access to coordinated care: In the 12 months ending in June 2013, program enrollment more than doubled, from 132,227 to 352,236. As of June 2013, 47 percent of Colorado Medicaid beneficiaries were enrolled in the program and hence had access to coordinated care.
- Fewer admissions and readmissions: Because of better care management and coordination, admissions and readmissions stemming from exacerbations of chronic conditions have declined. For example, inpatient admissions were 22 percent lower among enrollees with chronic obstructive pulmonary disease enrolled in the program for 6 months or more, as compared with similar beneficiaries not enrolled in the program. Similar analysis shows that the program has reduced admissions among those with diabetes (by 9 percent) and hypertension (by 5 percent). In addition, readmission rates among enrollees are 15 to 20 percent lower than in a similar population prior to program implementation.
- Slowing growth in ED use: Since the program began, ED use by ACC enrollees has increased by 1.9 percent, well below the 2.8-percent increase among Medicaid beneficiaries not enrolled in the ACC program.
- Less use of high-cost imaging: The program has reduced use of high-cost imaging services by 25 percent, as compared with a similar population prior to program implementation.
- Cost savings: In fiscal year 2012-2013, the improvements outlined above generated an estimated $6 million in savings for the State of Colorado, after taking into account the costs of care coordination and other program-related activities.
Planning and Development ProcessKey steps included the following:
- Obtaining Federal and legislative authority: Program developers wrote an amendment to the Medicaid State Plan and requested that the ACC be added to the Medicaid budget plan for 2009.
- Selecting RCCOs and SDAC: Program developers wrote and distributed requests for proposals to organizations that might be interested in applying to become RCCOs and the statewide SDAC. They subsequently conducted competitive bidding processes to choose these organizations.
- Developing and explaining PCMP contracts: Program developers adapted the existing State contract to create a contract for PCMPs. They also provided consultations via telephone to primary care providers who had questions about various contract provisions.
- Engaging stakeholders: Program developers created a Program Improvement Advisory Committee (PIAC), which meets in person quarterly and via phone conference between quarterly meetings. Each RCCO's local advisory committee meets at least quarterly.
- Communicating with various groups: Program developers used various mechanisms to explain the program and its goals to department employees, health plans, providers, Medicaid beneficiaries, and the public.
- Collaborating with commercial payers: ACC leaders decided to become part of the Centers for Medicare & Medicaid's Comprehensive Primary Care Initiative. This decision allowed ACC to partner with commercial payers to develop consistent business practices, including standardizing quality reporting and other requirements placed on primary care providers. This approach allows payers to assist providers in improving quality and efficiency while minimizing the administrative burden associated with such requirements.
- Ongoing refinement of model: Program developers employ an iterative approach to improving this model, adjusting reimbursement methods, performance indicators, and other key elements on an ongoing basis.
Resources Used and Skills Needed
- Staffing: The State budget did not initially create additional positions for the ACC. Instead, three existing Department of Health Care Policy and Financing staff each devoted a portion of their time to the program. At present, 10 full-time staff work on the ACC, including 1 section manager, 1 programmatic lead/supervisor, 2 RCCO contract managers, 2 coordinators, 1 public engagement and policy staffer, and 3 policy analysts. This is in addition to extensive cross-agency coordination with staff members in other departments.
- Costs: Annual program costs in fiscal year 2012-2013 totaled $36,437,324, which covered the costs of care coordination, network development, and practice support services.5 As noted, the program has generated savings that exceed this amount by an estimated $6 million.
Funding SourcesColorado Department of Health Care Policy and Financing
Getting Started with This Innovation
- Assign dedicated staff: Developing this type of initiative represents a significant time commitment. Dedicated staff are needed to initiate and grow the program, even if that requires requesting additional funds.
- Prioritize selection of vendor providing data support: Choose a vendor to create the data registry and other data-related support early in the process, ideally prior to choosing the regional organizations. This approach ensures that critical data-tracking capabilities are operational when the program initially launches.
- Spend time explaining contracts to providers: Providers may not have legal assistance and may be intimidated by the complexity of State contracts. To address this issue, set up a mechanism (e.g., a telephone line) for providers to get their questions answered and concerns addressed by qualified individuals at the State level.
- Engage stakeholders: Develop advisory committees at the State and local levels to address stakeholder concerns and obtain their input on proposed initiatives.
- Develop detailed communication plans: Program developers should share information about program goals and progress on a regular basis, using specific and purposeful communication plans targeted at individual stakeholder groups, including State employees, health plans, Medicaid beneficiaries, providers, and the general public. Various vehicles can be used, including newsletters, social media, and traditional media.
- Choose performance metrics and set targets: Performance metrics and associated targets should be identified based on program goals and the specific challenges that the target population faces. Metrics that might be of interest early in the program's evolution often include ED visits, use of high-cost imaging services, and inpatient admissions and readmissions.
- Allow flexibility in care coordination activities: Each regional organization should be free to design initiatives that will work well given the existing organizational infrastructure and the needs of the population in the local area.
Sustaining This Innovation
- Disseminate performance data: Disseminating performance data on an ongoing basis will validate provider efforts to improve access and quality, encourage further improvement in these areas, and sustain provider interest in the program.
- Regularly review and modify performance measures: Continually monitor the needs of the population and develop new performance measures to reflect those needs. For example, the ACC recently added well-child visits as an indicator in response to a significant increase in enrollment among those under the age of 18.
- Work with commercial payers: By working with commercial payers to develop consistent processes and requirements, program leaders can make participation in this type of initiative more attractive to primary care practices.
Contact the Innovator Kathryn Jantz, Program Lead, Accountable Care Collaborative
Kevin Dunlevy-Wilson, Policy Analyst
Colorado Department of Health Care Policy and Financing
1570 Grant Street
Denver, CO 80203-1818
E-mail: email@example.com; firstname.lastname@example.org
Innovator DisclosuresMr. Dunlevy-Wilson and Ms. Jantz reported having no financial interests or business/professional affiliations relevant to the work described in the profile, other than the funders listed in the Funding Sources section.
References/Related ArticlesBrino A. State Medicaid ACO program sees double year-over-year savings. Healthcare Payer News. November 5, 2013. Available at: http://www.healthcarepayernews.com/content
Rodin D, Silow-Carroll S. Medicaid payment and delivery reform in Colorado: ACOs at the regional level. The Commonwealth Fund. March 2013. Available at: http://www.commonwealthfund.org/~/media/Files/Publications/Case%20Study/2013/Mar
/1666_Rodin_Medicaid_Colorado_case_study_FINAL_v2.pdf (If you don't have the software to open this PDF, download free Adobe Acrobat Reader® software .).
Data analytics in Medicaid: spotlight on Colorado’s Accountable Care Collaborative. The Kaiser Commission on Medicaid and the Uninsured. October 2013. Available at: http://kaiserfamilyfoundation.files.wordpress.com/2013/10/8484-data-analytics-in-medicaid1.pdf.
Colorado Department of Health Care Policy and Financing. Legislative request for information #2: Accountable Care Collaborative. November 1, 2013. Available at: http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf%3C
Health care through the eyes of Coloradans: new data on the consumer perspective. Colorado Health Institute. November 14, 2013. Available at: http://www.coloradohealthinstitute.org/uploads/postfiles/SNAC_Lab_Presentation_11-14-13_nn.pdf.
Kocot SL, Dang-Vu C, White R, et al. Early experiences with accountable care in Medicaid: special challenges, big opportunities. Popul Health Manag. 2013;16 Suppl 1:S4-11. [PubMed] Available at:
Markovich P. A global budget pilot project among provider partners and Blue Shield of California led to savings in first two years. Health Aff. 2012;31(9):1969-76. [PubMed]
Landon BE. Keeping score under a global payment system. N Engl J Med. 2012;366(5):393-5. [PubMed]
Khoury AJ, Hall A, Andresen E, et al. The association between chronic disease and physical disability among female Medicaid beneficiaries 18–64 years of age. Disabil Health J. 2013;6(2):141-8. [PubMed]
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Original publication: July 02, 2014.
Original publication indicates the date the profile was first posted to the Innovations Exchange.
Last updated: July 02, 2014.
Last updated indicates the date the most recent changes to the profile were posted to the Innovations Exchange.