High-risk care management impact on Medicaid ACO utilization and spending

States are experimenting with accountable care organization (ACO) contracts to slow Medicaid spending growth. There is limited information on how ACOs have impacted expenditures in Medicaid, which includes a relatively heterogenous population with less spending compared with Medicare. This study aimed to evaluate the impact of high-risk care management on spending and utilization within Massachusetts' largest Medicaid ACO.

This observational study analyzed Medicaid claims data from Massachusetts' largest Medicaid ACO utilizing staggered program entry from 2016 to 2021 (n = 158,441 total beneficiaries). It included adults aged 18 to 64 years with multiple chronic conditions and used a claims-based algorithm for participant selection. We examined spending and clinical event rates of those participating and not yet participating in a high-risk care management program. Between 2016 and 2021, 2479 beneficiaries were identified as high risk and entered the program.

The study utilized a difference-in-differences approach with linear regression models to assess the impact of care management. The analysis accounted for time-stable and time-changing covariates, including comorbidity levels and age.

Participation in the program for 7 or more months was associated with a $243 reduction in monthly spending compared with similar beneficiaries who had not yet started the program (95% CI, -$479 to -$6). There also were comparable reductions in emergency department visit and hospitalization rates.

These early ACO data findings suggest that upstream care management of high-risk individuals may represent a viable approach for slowing Medicaid spending growth.