• ACO Manages Care for a Growing Medicaid Population

    Oct 17, 2013

    Four Minnesota partners—a county hospital, a health clinic, an HMO, and the public health department—are dividing the risk associated with a high-risk patient population. 

    Hennepin Health’s county-based accountable care organization (ACO) integrates medical, behavioral, and social services, with a specific emphasis on high users of medical care among Medicaid beneficiaries in Hennepin County, Minn. The ACO, which included more than 6,000 enrollees in February, is a partnership between four county government–affiliated organizations:

    • Hennepin County Medical Center, a 462-bed hospital
    • NorthPoint Health and Wellness Center, a federal quality health center (FQHC) that offers medical, dental, and mental health services
    • Metropolitan Health Plan, a not-for-profit HMO serving Medicare and Medicaid enrollees 
    • Hennepin County Human Services and Public Health Department 

    The state of Minnesota pays Hennepin Health a set per-member-per-month fee to cover the cost of care for enrollees, with four different rates being paid based on gender and age. The partners are at full risk financially for any surpluses or deficits at the end of the year. 

    Although most savings are reinvested in program services, a small amount goes to participating providers according to an annual gainsharing formula. In its first year, the ACO tied these incentives to reducing admissions, readmissions, and ED visits by at least 10 percent and to improving performance on preventive care measures by at least 5 percent. 

    Positive Results 

    By improving the quality of care and promoting the appropriate use of health services by newly enrolled Medicaid beneficiaries, Hennepin Health has achieved the following results:  

    Fewer admissions, readmissions, and emergency department (ED) visits. Inpatient admissions declined by 29 percent—from 17 per 1,000 enrollees in January 2012 to 12 per 1,000 by December 2012. The readmission rate for ACO enrollees fell by 2 percent between January and July 2012. ED visits by ACO enrollees fell by 39 percent between January and December 2012. 

    Lower costs for high users of healthcare services. Care coordination has reduced the cost of care for high users of health services by 40 percent to 95 percent. In addition, medication management for these enrollees has led to a 50 percent reduction in their prescription drug costs. 

    High enrollee satisfaction. Surveys reveal that 87 percent of enrollees are satisfied with the ACO. 

    Population Management

    Hennepin Health achieved its results through a number of joint activities that facilitate coordinated care. Examples include the following strategies:

    Care coordination. The ACO identifies the top 200 users of health services, who account for 64 percent of total health costs. A care coordinator contacts new ACO enrollees and encourages them to participate in a health assessment and primary care visit. Enrollees who cannot be reached by telephone are assigned to a physician near their homes. If they seek care at a Hennepin Health site, they are linked to that primary care provider. 

    The care coordinator also assesses the patient’s medical, behavioral, and social needs and assigns the enrollee to one of three tiers of care. These tiers dictate the degree of ongoing care coordination, management, and monitoring that the enrollee will receive. 

    Medical and behavioral health collaboration. ACO partners have stationed mental health and chemical health clinicians in primary care clinics to expedite access to therapy and provide referrals for more intensive services. 

    Urgent care option. The ACO established an urgent care clinic in the ED to treat patients’ nonemergent needs and link them to primary care. 

    Medication management. The ACO identifies enrollees with a history of high prescription and pharmacy use. Pharmacists contact the enrollees to coordinate prescriptions and answer questions. 


    Hennepin Health tracks cost, usage, and health outcomes through electronic health records and a central data warehouse that ACO partners can access for patient information.  The ACO also reports its performance based on MN Community Measures (a state-based quality improvement organization), HEDIS measures, and Press Ganey patient satisfaction survey data. 

    The partners know that they must continue to support the ACO or face escalating costs they cannot afford and the possibility of having to deny needed services to beneficiaries. This reality helps sustain a sense of urgency to ensure the ACO's ongoing success. The partners are also looking beyond their current capabilities to expand their services to new populations, including the disabled and Medicaid families with children.  

    This article is adapted from “County-Based Accountable Care Organization for Medicaid Enrollees Features Shared Risk, Electronic Data Sharing, and Various Improvement Initiatives, Leading to Lower Utilization and Costs,” Agency for Healthcare Research and Quality (AHRQ) Health Care Innovations Exchange, AHRQ.