CMS approves Massachusetts’ transition to ACO model for Medicaid

A five-year, $52.5 billion Medicaid waiver for Massachusetts has been approved by CMS, allowing the state to reorganize its MassHealth program.

The overhaul will include transitioning the program to an accountable care organization (ACO) model, while offering ACOs and community health groups $1.8 billion in incentives for improvements in care integration and outcomes for behavioral health and long-term services and supports.

“Our administration is pleased to announce this innovative waiver as a major step toward creating a sustainable MassHealth system for the people of the Commonwealth,” Massachusetts Gov. Charlie Baker said in a statement.  “This waiver is the first major overhaul of the MassHealth program in 20 years and includes critical reforms to promote coordinated care, hold providers accountable and offer expanded access for substance abuse disorder services driven by the opioid crisis.”

Massachusetts’ previous five-year waiver was due to expire in July 2017. The new deal prevents the state from losing $1 billion in federal funds for the 1.9 million people served by MassHealth.

“We’re excited to approve this innovative Medicaid waiver, which is another step forward in the American healthcare system’s shift toward value. This waiver will allow MassHealth to partner with provider-led care delivery organizations to deliver quality, patient-centered care to Medicaid beneficiaries,” said HHS Secretary Sylvia M. Burwell.

Among the goals of the new waiver will be “near universal health coverage” among Massachusetts residents. The state has one of the highest insured rates, though 2 percent of its population remains uncovered despite an individual mandate being in place since 2006.

There’s also help for safety-net hospitals in the waiver, as the number of facilities eligible for uncompensated care payments from CMS will be doubled from seven to 15.