The Essential Role of States in Financing, Regulating, and Creating Accountable Care Organizations

Seventeen states currently are implementing accountable care strategies in Medicaid or state employee health programs. State activity runs the gamut from financing accountable care models to developing state standards that certify public and private accountable care organizations, to aligning accountable care principles with the creation of new community-based organizations or Medicaid managed care organization contracts. This article describes the range of strategies taken by states to drive value-based payment mechanisms aligned with accountable care principles. It also shows the power states have to influence financing of these models in Medicaid, state employee health programs, and commercial insurers’ plans, thus creating new opportunities for furthering provider participation.