NJ ACO Pilot Bill Approved by Senate Budget and Appropriations

“Under the current health care delivery and payment structure, Medicaid recipients are often unable to access high-quality, cost-effective health care,” said Senator Vitale, D-Middlesex, and Vice Chair of the Senate Health, Human Services and Senior Citizens Committee. “As a result, we pay more money for less-than-stellar results in terms of positive patient outcomes. It’s time that we move away from the existing system which puts vulnerable New Jerseyans at a disadvantage to receive high-quality care, and begin to invest State resources in a smarter, cost-effective model of health care for Medicaid enrollees.”

“This bill is about spending State health care dollars smarter, and improving care for people who depend on our State’s health care safety net for access to medical services,” said Senator Whelan, D-Atlantic, and a member of the Senate health panel. “Right now, we lack the objective evaluation and cost-effective protections to make sure that we’re getting the biggest bang for our buck, and providing the best care possible for people enrolled in the Medicaid system. It’s time that we do better for New Jerseyans in need.”

The bill, S-2443, would create the “Medicaid Accountable Care Organization Demonstration Project” to ensure that Medicaid recipients in New Jersey have access to high-quality, cost-effective medical care. The bill would establish a demonstration project within the Department of Human Services to increase access to primary care, behavioral health care, and dental care by Medicaid recipients in a particular region. The bill would also improve the quality of health care by establishing objective metrics and relying on patient experience, and would reduce unnecessary and inefficient care without interfering with a patients’ access to the health care providers and services they need to stay healthy.

The bill would authorize Accountable Care Organizations (ACOs), defined as nonprofit corporations, to provide coordinated, high-quality care to Medicaid recipients in a municipality or defined geographic region with more than 5,000 Medicaid recipients. If the program proves successful in lowering costs and improving care, the sponsors said they would consider working with the Department to establish a permanent program.

“As part of the federal health care reform law, states have been given the authority to empower ACOs to provide coordinated, high-quality, cost-effective health care to Medicaid recipients,” said Senator Whelan. “Frankly, we’re flying blind right now in terms of the level of care available to Medicaid recipients, and it’s time to try something new to create a high-quality standard of care that allows us to achieve the best patient outcomes at a fraction of the current price. By shifting to a smarter model of care, we can maximize the impact of our health care investment.”

“Whether it’s FamilyCare or the medical home pilot program, New Jersey has been a laboratory for best practices in administering and delivering health care for New Jerseyans in greatest need, and the Medicaid ACO Demonstration Project is another step forward in better health care at less cost to the State’s taxpayers,” said Senator Vitale. “We recognize that we have a responsibility to provide quality care for people who depend on Medicaid, and we have to stretch limited health care dollars as far as they will go. By moving to an ACO model of delivering health care services, we can achieve both, and will once again set New Jersey up as a national model for other states to follow.”

The bill now heads to the full Senate for consideration.